The devastating flooding experienced in the German states of North Rhine-Westphalia and Rhineland-Palatinate is expected to drive insurance and reinsurance industry losses of between €4 billion and €5 billion, according to the German Insurance Association (GDV).
Flooding in Germany, photo from Roberto Pfeil – AFP
Last week’s flooding impacted parts of Central and Western Europe, including Belgium, the Netherlands, and Switzerland, although Germany remains the worst affected region.
So far, industry loss estimates appear to be ranging from €2.5 billion to €5 billion across Europe, although uncertainty remains as the severe damage caused makes it challenging to assess.
Today, the GDV has described storm “Bernd” as one of the most devastating storms in the recent past, warning that the damage is likely to be higher than that witnessed in the August flood of 2002, which drove insured losses of €4.65 billion.
For last week’s flooding, “We are currently counting on insured losses of 4 to 5 billion euros,” said Jörg Asmussen, general manager of the GDV.
Importantly, this first insured loss range from the GDV does not include the damage experienced in both Saxony and Bavaria, so a range of up to €5 billion is high considering this isn’t even all of Germany.
The GDV says that it will provide an updated estimate in the coming week as insurers continue to evaluate the events.
“Overall, this year with storms, floods, heavy rain and hail should be the most damaging year since 2002,” said Asmussen.
This loss estimate for some of Germany comes after analysis by ICEYE shows that a minimum of 43,400 buildings across Europe are estimated to have been impacted by the flooding.
Analysts at Berenberg said recently that the flooding in Europe would cost reinsurers up to €3 billion, while Aon warned of a multi-billion dollar insurance and reinsurance industry loss from the event.
But with the initial insured loss estimate from the GDV being between €4 billion and €5 billion, and not even for the whole of Germany, it seems some of the earlier market estimates for the whole of Europe are potentially very conservative.
