German Insurance Association expects recent flooding to cost insurers around €2bn

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The German Insurance Association (GDV) reported last week that torrential rains and flooding in Bavaria and Baden-Württemberg, between May 31st and June 4th, is expected to result in insured losses of around €2 billion (USD 2.15bn).

The floods damaged homes, businesses, infrastructure, and farmland across parts of southern Germany, prompting the evacuation of thousands of people.

According to the GDV, some 47% of buildings in Bavaria are insured against all natural hazards, and in Baden-Württemberg this figure rises to 94%.

“We expect insured damage in the region of around two billion euros,” said GDV Managing Director, Jörg Asmussen. “Because the floods in particular have not yet expired on the Danube, this estimate still attaches a certain amount of uncertainty.”

Insurance and reinsurance broker Aon, in a recent report, said that given the extent of the floods, both economic and insured losses are likely to reach at least into the hundreds of millions of EUR, possibly higher.

“Economic and insured losses from thunderstorm activity across different European regions are estimated to reach additional tens of millions of EUR or more,” added the broker.

As noted by Aon, insurers and reinsurers have already had to cover floods in Germany in recent months. Back in December, many rivers in northern and central Germany overflowed their banks, while the May floods in Saarland and Rhineland-Palatinate were also devastating.

Currently, the recent floods in Bavaria and Baden-Württemberg are expected to drive insurance industry losses of roughly €2 billion, but this could rise in the coming days and weeks as the full extent of the damage is understood.

“For us, top priority now is to help those affected quickly and efficiently. The insurers have special operational plans for such cases. They pool their staff on site and in the administration in order to be able to record and process the claims reporting quickly,” said Asmussen.

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