Spanish floods likely to cost re/insurers billions of euros

The devastating floods in eastern and southern Spain are likely to cost re/insurers billions of euros, according to insurance broker Aon. 

Aon said its in weekly catastrophe impact report that the event, which caused at least 158 deaths, was “one of the nation’s worst natural disasters in recent memory”. 

“Catastrophic flooding has caused extensive property and infrastructure damage across the Valencia and Castilla-La Mancha communities, with additional damage in Andalusia, Murcia, and the Balearic Islands,” the report said.  “Additional storms over the Almería Province also produced large hailstones and material losses, especially within the El Ejido and Dalías municipalities. “Emergency teams continue search and rescue operations for missing individuals, and total economic and insured losses may potentially reach into the billions of euros. The event remains ongoing, with other parts of Spain placed under weather warnings.”

The report added that widespread damage across residential, commercial, and industrial sectors as well as significant motor damage will potentially drive total economic impact into billions of euros. The full impact also extends to road repairs, building restorations, and lost productivity in affected regions, it said.  

“As assessments continue and the event progresses in other regions of the peninsula, the insurance sector is bracing for potentially one of the costliest events in Spain on record,” the report said. “Insured damages will be covered by the Insurance consortium (Consorcio de Compensación de Seguros) and private insurers, while agricultural damage is covered through Agroseguro. 

“According to a report by UNESPA (association of re/insurers), insurance take-up rate for residential dwellings in Valencia Province is 77%, compared to a national average of 74%. In addition to significant flood losses on property. 

“Although a large part of the payments is expected to result from property flood damage, a notable loss also occurred in agriculture. A smaller part of total losses occurred due to hail, in El Ejido, with municipal authorities estimating the damage at around €100 million ($109 million).”

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.