Damage claims faced by German insurers for hail storms this year are almost twice the amount expected at 2.7 billion euros, a trade group said on Tuesday of a figure which will eat into sector profitability.
Reinsurer Munich Re last month estimated the industry-wide hit at 1.5 billion euros, of which its share was 180 million euros, including 160 million from reinsurance.
“Two factors contributed to this immense volume of damage: the unusually large size of the hail stones and the movement of the hail storms through a densely populated area,” GDV (Berlin-based German Insurance Association) said in a statement.
It declined to give an estimate of the breakdown of costs between insurers and reinsurers, who take on a portion of insurers' claims in exchange for part of the profit.
While Germany's insurance sector is big enough to absorb the damage, the hail storm claims will come as an unwelcome hit to profit in an industry already under pressure from low interest rates, which are choking investment income.
Reinsurer Swiss Re has said it expected the storms to cost it around $240 million, given an insured market loss of between $2 billion and $2.7 billion.
Hannover Re said it expected to face around 15.3 million euros in claims while insurer Allianz has estimated its share of the damage at about 200 million euros.
Damage from extreme weather looks set to rise, the GDV said, referring to climate research that pointed to a potential 60 percent rise in hail storm losses by the middle of the century.
The latest hail storms led to some 910,000 claims, including 450,000 automobile claims worth 900 million euros, the GDV said.
The hail losses came after 1.8 billion euros in damage for flooding in June, which led to about 140,000 claims. ($1 = 0.7368 euros)
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