German floods: Insurance loss worth 5 billion euros incurred says GDV chief

Germany is likely to incur an estimated EUR 4 billion and EUR 5 billion market losses in insurance for the flood damage in the North Rhine-West­pha­lia and Rhi­ne­land-Pala­ti­nate regions, German insurance association, the GDV stated Wednesday. "We currently expect insured losses of 4 to 5 billion euros," said Jörg Asmussen, managing director of the insurance federation, in a statement. This makes the recent “Bernd” storm which mainly wrecked property in two federated states of the Rhineland as “one of the most devastating calamities of the recent past", he added. This damage is likely to be even higher than that of the August flood in 2002 that stood at 4.65 billion euros, according to the preliminary estimates made by the agency. 

GDV stated that the widespread flooding and storm damages caused in Saxony and Bavaria were not yet included in the initial estimate and that the large-scale destruction hampers communication and on-site inspection to calculate the damage. Insurers are still evaluating the events, and the association will update the total loss estimates for the July storms for next week, it said in a statement.

"Overall, this year with storms, flooding, heavy rain and hail are likely to be the most damaging year since 2002, "the chief executive of the German Insurance Association (GDV), Asmussen said. He continued, that in the month of June heavy rainfall and hail storms had already caused an estimated insured loss of 1.7 billion euros and the insured storm damage due to massive flooding last week jumped to 10.9 billion euros. Insurers have been working under pressure for days to assess and settle claims in the affected areas, Asmussen stressed. 

"We are doing everything we can to help pragmatically and efficiently so that our customers' claims can be processed quickly and without complications," said the GDV CEO. "My thoughts are with the people who have lost relatives and friends and those who fear for their belongings.”

Only 37% policyholders covered against natural disasters

In context to the emergency flood aid decided by the German government, Asmussen stated, that the damage that had occurred after the floods far exceeds the self-help capacities of the municipalities and districts. “To alleviate the immediate need, the disbursement of emergency aid, therefore, makes sense,” he reiterated. It would be appropriate if the mandatory insurance were integrated into a new overall concept that involves building, planning as well as disaster protection. Only 37 per cent of policyholders are covered against the dangers of natural disasters,47 per cent in North Rhine-Westphalia, and approximately 94 per cent in Baden-Württemberg, where this coverage was compulsory until 1993. 

"While it is encouraging that nearly half of the building owners now have protection against other natural hazards, only 46 percent are protected against other natural risks such as heavy rains and floods. For the rest, they should review and adjust their insurance coverage," Asmussen said.