Insured losses for flood victims in Germany to reach billions

Insured losses for recent flood victims in Germany will likely fall between €2 billion and €3 billion, or $2.1 billion and $3.2 billion, according to data compiled by Moody’s RMS Event Response.

A series of low-pressure systems moved slowly over central Europe between May 28 and June 3, dumping heavy rain and flooding small rivers in Baden-Württemberg and Bavaria in southern Germany, including several sections of the Danube River.

Known as Van Bebber (Vb-type) cyclones, Moody’s said the weather systems originate in the Mediterranean and central Europe and have been responsible for some of the most severe flood events in the region.

“In Baden-Württemberg, given the flood insurance take-up rate is as high as 94%, most of the residential losses will be covered,” Moody’s Assistant Director Daniel Bernet said in a release.

“Unfortunately, this high level of coverage is not the case in Bavaria where the flood insurance take-up rate is 47%,” he added. “Similarly, properties will not be covered for direct ground-water intrusions.”

Moody’s said its loss estimate was based on an analysis reflecting insured property damage, spoiled contents, and business interruption across residential, commercial, industrial, agricultural property, and automobile lines.

The estimate does not include insured losses to transport and utility infrastructure businesses, crops, or flooding in parts of Switzerland, Austria, Czechia, Hungary, and Italy, although Moody’s said losses outside Germany are projected to be minimal.

The estimate also excludes potential losses from subsequent flooding further downstream, or new flooding brought on by more rain, Moody’s said.

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