European flooding to cost insurers more than $1.5bn

Torrential rainfall which caused widespread and fatal flooding in central Europe from September 12-16 will cost insurers at least $1.5 billion, according to Aon. 

The insurance broker's weekly catastrophe update said the flooding, which was caused by nearly continuous rain over five days killed at least 26 people. 

But it said the flooding could have been worse had flood defences put in place after a similar scale flooding event in 1997 not been implemented. 

"Central Europe was impacted by significant flooding as a result of nearly continuous rain on September 12-16," the report said. "Initial assessments in the most affected countries and the extent of damage seen in disaster areas suggest that it will be one of the costliest events on record for the region, with billions of euros in total losses.

"Significant damage occurred in parts of the Czech Republic, Poland, and Austria. Additional impacts were reported in Slovakia, Romania, and elsewhere." 

It said the flooding was caused by low-pressure system Boris which developed in the central Mediterranean and later stalled over the Central European region as a very humid Genoa low, bringing rounds of torrential rain for several days. 

"Another factor that contributed to the severity of the event was the substantial decrease in temperatures caused by an ingression of very cold air of polar origin - this limited evaporation and resulted in the retention of water in the catchments," the report added. "The event was forecast well in advance, which allowed for ample preparations, revision of warning systems, evacuation plans, and effective water management in order to make the most of the retention capacity of existing reservoirs." 

In the Czech Republic, the national insurance association initially expected CZK17 billion ($750 million) of total insured losses, split roughly in half between residential and commercial/industrial claims. This estimate will evolve in the coming weeks, with roughly 19,000 claims with losses of CZK2.0 billion ($89 million) already registered by September 18. Total economic losses will be much higher. 

The report added: "The event will very likely rank among the costliest events for Polish insurers on record, with the current expectation of the severity below the historic event of 2010. While the event was widely compared to the 1997 flood and damage was catastrophic in many of the same locations, the largest cities affected by the 1997 event were largely protected in 2024.

"The situation in Austria is still quickly evolving and most of the insurers have not provided an expectation of losses. A preliminary estimate from the Austrian insurance association (VVO) made on September 20 was between €600 and 700 million, with a potential for additional increase.

"Impacts in Slovakia were substantially lower and were largely limited to western and northwestern parts of the country. Slovak insurance associations noted thousands of claims being filed and on September 18, they estimated that the total loss would exceed €15 million ($16.7 million), well below the impact of the 2010 flood.

"In summary, data disclosed by insurers and associations across the region suggest that total insured property losses will most likely exceed €1.5 billion."

Elsewhere, a historic rainfall event occurred within the Carolinas on September 15-16 due to a cluster of offshore storms, labeled as Potential Tropical Cyclone #8. Significant flooding was seen primarily across North Carolina’s New Hanover and Brunswick counties, leading to inundated homes and businesses, stalled vehicles, and washed-out roads. Total aggregated losses could reach into the hundreds of millions of dollars. 

Insured losses from Typhoon Yagi, which caused more than 600 deaths and widespread damage across southern China and Southeast Asia in the first week of September, has incurred insured losses in the billions of dollars, according to the report. A second typhoon, Bebinca, which affected the Philippines and China, has caused economic and insured losses in the hundreds of millions of dollars, the report said.  

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