Monday, July 26, 2021

Re/Insurance: "European floods: Aon says economic loss very likely over $10bn"

Although European rivers have been flooding forever and causing damage for as long as people have been around to take note:

Those are Elbe hochwasser marks at Königstein via

The recent flooding looks to join the 2002 and 2013 floods in the €10 billion damage category.

From Artemis, July 23:

Economic losses from the recent severe flooding across Europe is likely to exceed US $10 billion according to insurance and reinsurance broker Aon, a figure we expect will end up being eclipsed once all the losses are counted across the impacted regions. 

It’s another data point that shows the impacts of the devastating floods which impacted parts of central and western Europe this month, with Germany the country worst affected.

While a lot of the media coverage has therefore been focused on Germany, the impacts across Europe reached much more widely.

The cause was a slow-moving area of low pressure, named Bernd, which drove the catastrophic flooding across parts of Western and Central Europe from July 12th to 18th.

At least 209 people have been killed in various flood-related incidents and many more remain listed as missing after the tragic catastrophe.

In particular, record levels of rainfall on July 13th and 14th that resulted in several small and large tributaries of the northern and southern branches of the Rhine River overflowing.

Thousands of properties were inundated, as we explained yesterday it’s thought that minimally almost 72,000 buildings may have been impacted by the floods.

Germany was hardest hit, followed by Belgium. But insurance and reinsurance broker Aon noted that widespread flood- and storm-related damage was also reported in Switzerland, France, Luxembourg, United Kingdom, Austria, the Netherlands, Italy, Poland, Hungary, Slovakia, and the Czech Republic.

So the footprint of this event is particularly significant, beyond the very high water levels and devastation seen in parts of Germany and Belgium.

All of which suggests the economic cost to European nations will be particularly high.

Aon doesn’t make an attempt to estimate this, but says that it’s very likely the economic loss will be above US $10 billion.

That seems almost assured when you consider that in Germany just in the North Rhine-West­pha­lia and Rhi­ne­land-Pala­ti­nate regions, the insurance market is expected to take a loss of between EUR 4 billion and EUR 5 billion (close to US $6bn at the top-end, with more to come from the Saxony and Bavaria regions when estimates emerge for those areas of the country as well....