(Bloomberg) -- Insurers will face higher-than-expected claims related to floods in Germany, according to Fitch Ratings, dealing another blow to an industry squeezed by low interest rates and decreasing prices for policies.
Claims linked to torrential rain, thunderstorms and floods that hit southern Germany from the end of May could reach 1 billion euros ($1.1 billion), Fitch said in a report Tuesday. The credit-rating company said public-sector insurers may be most affected by the disasters, including Versicherungskammer Bayern and SV SparkassenVersicherung Holding AG, both owned by German regional savings banks.
|Lack of home natural hazard cover
The economic losses could be significantly higher, given that only a third of home-insurance policies in Germany include natural hazard cover, Fitch said. The German insurance industry’s GDV lobby group has estimated claims of about 450 million euros from storm “Elvira” that primarily hit Germany’s Southwest at the end of May.
Fitch increased its forecast for the combined ratio of German non-life insurers to 95% from 93%, indicating rising claims and costs as a proportion of premiums.
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