Flooding Reinsurance Estimate Is Released
The European floods that have impacted Germany, the Czech Republic and surrounding countries are expected to cause around 2.75 billion euros in insured losses with circa 1.3 billion euros [$1.7 billion] falling to global reinsurers — including those based in Bermuda — according to a Keefe, Bruyette & Woods [KBW] analysis.
The estimate is in line with Nomura’s predicted range of around 2-billion euros in insured losses which was published on the same day as KBW’s forecast last Friday [7 June].
The Nomura and KBW analysts said the flood losses would be manageable for insurers and reinsurers from both capital and earnings perspectives.
Ongoing flooding in Central Europe began after several days of heavy rain in late May and early June. Flooding and damages have primarily affected south and east German states [Thuringia, Saxony, Saxony-Anhalt, Lower-Saxony, Bavaria and Baden-Württemberg], western regions of the Czech Republic and Austria. Switzerland, Slovakia, Belarus, Poland, and Hungary have been affected to a lesser extent.
Flooding in Passau, Bavaria where the Danube, Inn and Ilz rivers converge
The flood crest then progressed down the Elbe and Danube drainage basins and tributaries, leading to high water and flooding along their banks.
“While the severe flooding that has hit central Europe is still ongoing, it seems increasingly likely that losses for insurers will be lower than for the severe floods of 2002,” added KBW, citing better flood protection methods introduced during the last decade.
In 2002 catastrophic floods in central Europe resulted in 3.4 billion euros of insured losses.
