Costly European floods will cost re/insurers up to $7.7 billion
July’s flooding in Western and Central European will result in insured losses of between €5 billion and €6.5 billion ($6 billion and $7.7 billion), some of which will likely be passed to reinsurers, according to cat risk modeller RMS.
The floods between July 12 and 18 spanned several countries and killed over 200. RMS reconstructed the flood hazard footprint across the worst affected areas to calculate losses, including western and southern Germany, eastern Belgium, eastern France and Luxembourg.
Germany accounted for the lion’s share of losses: about 70 percent of the total, with Belgium accounting for 25 percent.
Daniel Bernet, product manager for Europe Flood Models at RMS, said: “In terms of loss, this event is expected to be comparable to the costliest European flood events in recent history, the Central and Eastern Europe floods of 2002 and 2013.
“However, unlike the 2002 and 2013 events during which overtopping and breaching of major rivers contributed substantially to overall damages, the 2021 event occurred in a different region and was characterized with much steeper and faster flood waves with higher flow velocities in smaller rivers and tributaries that caused substantial structural damage, and regretfully, an unusually high number of fatalities.”
The total insured loss from July’s flooding is likely to be even higher. RMS’s estimate includes insured property and business interruption losses to residential, commercial, industrial, automobile, and infrastructure lines and accounts for potential post-event loss amplification and extended business interruption. However, losses in Switzerland, Austria and Bavaria and Saxony in Germany, which occurred outside the period of heaviest rainfall are not included. Neither are those in the Netherlands, which also saw heavy flooding but is outside the model’s domain.
Flooding in one Dutch town, Valkenburg, alone is estimated to have caused $470 million of damage, its mayor told journalists last week.
