Insured losses from Central European floods could hit €3.5 billion
Affected areas include the Czech Republic, Austria, Poland, Slovakia, Hungary, Germany and Italy.
In mid-September, Storm Boris dropped a significant amount of rain and snow across Central and Eastern Europe, causing flooding that left at least 22 people dead and tens of thousands without power. According to Moody’s RMS Event Response, insured losses from this flooding will likely fall between €2.5 billion and €3.5 billion ($2.8 billion to $3.9 billion USD).
Moody’s loss estimate covers affected areas in the Czech Republic, Austria, Poland, Slovakia, Hungary, Germany and Italy, with the majority of loss concentrated in the Czech Republic, Austria and Poland.
The flooding was triggered by rainfall as high as 15.7 inches in some areas between September 11 and 19. Moody’s reports this storm was a Van Bebber, or Vb-type, cyclone. These storms are low-pressure systems with trajectories from the Mediterranian, and they have been responsible for several European flooding events, including in 1997, 2002, 2013 and as recently as May/June 2024.
Steffi Uhlemann-Elmer, director, model product management, Moody’s, offered the following commentary on the flooding:
“This September’s flooding has been a reminder of the long history of severe and widespread summer flooding that can affect many countries simultaneously over central and eastern Europe.
This event was unique in several ways. Firstly, the low-pressure system named ‘Storm Boris’ was long-lived and brought heavy rainfall and flash flooding to a large area from eastern Romania to northern Italy. After its destructive rainfall over Austria, the Czech Republic, and Poland, Boris was continuously supplied by moist air masses, and took a westward track, bringing extreme rainfall to Italy’s Emilia Romagna region. In recent history, only the August 2002 flood event has impacted a wider area.
Secondly, the weather pattern and associated severe rainfall and flooding were forecast over a week in advance. Warning chains and catastrophe response plans to coordinate efforts across states, regions, and communities had been activated, and preventive measures such as the release of water from reservoirs before the event had been taken. Thirdly, investments in flood defenses have paid off. Given the long history of flood events across the region, substantial investments were made over time to replace and redesign existing defenses, and to add new risk mitigation structures such as dams, dykes, and flood retention areas.”
Uhlemann-Elmer noted that these measures made a substantial difference in the loss outcomes for this flooding event, compared to those in the past. One major key in mitigating flood loss was the fact that the event did not lead to “serious inundation of build-up areas along the major Rivers’ Elbe, Danube, and Oder, as the flood wave that accumulated from the mountainous regions was either capped through retention or safely propagated through cities with heightened flood defenses.”
“Most of the overall estimated insured losses will be retained by insurers, but some reinsurance recovery is to be expected,” Uhlemann-Elmer concluded. “Overall, 2024 marks another costly year with several flood events on the balance sheet of insurers. Proactively managing severe weather risk and understanding correlation not only across countries but also across perils becomes ever more important.”