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July floods trigger Generali’s reinsurance coverage

3rd August 2021 - Author: Matt Sheehan

Italian insurer Generali has confirmed that its July flood losses in Germany have been capped at €100 million, after the disaster triggered the company’s per occurrence reinsurance coverage.

germany-flooding-july-2021

Flooding in Germany, photo from Roberto Pfeil – AFP

Catastrophic flooding and storms across parts of Western and Central Europe last month are expected to drive overall economic losses of over $10 billion, with insured losses of roughly €5 billion in Germany alone, which was the worst-affected country.

But Generali’s CFO, Cristiano Borean, has disclosed that the insurer’s losses in Germany at least will be limited by the natural catastrophe reinsurance program that it has in place.

At the same time, Generali confirmed that another prolonged period of destructive European storms through June will also trigger the coverage, after breaching the €100 million threshold.

The company announced earlier today that it would book overall catastrophe losses of €281 million for the H1 period, after reinsurance.

RMS

Together with a contraction in the investment result, this contributed to a 3.6% decrease in the operating result of Generali’s P&C segment, although the group’s overall operating result rose by 10.4% to €3 billion.

Other major insurers have already stated that they face large exposures to the flooding in Germany and elsewhere over July, although it remains to be seen how exactly reinsurance coverage will fit into the picture in these cases.

AXA, for instance, said alongside its Q2 results yesterday that the preliminary claims estimate from the floods is €400 million, before tax and net of reinsurance.

Likewise, Allianz is anticipating a total of more than 30,000 property damage claims and 5,000 for vehicle damages, with a total claims volume of more than €500 million.

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