Insured losses in Germany from Central Europe floods could hit $3.2bn: Moody’s RMS

Estimated insured losses in Germany from the Central Europe Floods will likely fall within the range of €2 billion to €3 billion (US$2.1 billion to US$3.2 billion), Moody’s RMS Event Response has stated.

Heavy and persistent rainfall fell across central European areas between May 28, and June 3, with major flooding hitting parts of Germany.

Between May 30 and June 3, southern Germany experienced a prolonged period of heavy rain which led to widespread flash and river flooding.

Flooding started with smaller rivers across the south of the country, mainly in Baden-Württemberg and Bavaria, with the Danube River later reaching flood stage in several locations as the floodwater from the headwater catchments accumulated downstream.

Moody’s most recent loss estimate reflects insured property damage, spoiled contents, and business interruption across residential, commercial, industrial, agricultural property, and automobile lines.

The analysis, which was made using Moody’s RMS Europe Inland Flood HD Models, also considers sources of post-event loss amplification (PLA), recent inflationary trends, exposure growth, and increases in insurance take-up.

Analysts noted that this estimate does not include insured losses to non-modeled exposures such as transport and utility infrastructure lines of business, or crops.

The estimate does include insured losses for southern Germany, which analysts expect to constitute most of this event’s loss.

It excludes losses from flooding in Switzerland, Austria, Czechia, Hungary, and Italy as contributions from these countries are anticipated to be minimal, analysts noted.

Potential losses from subsequent flooding further downstream and/or triggered by renewed precipitation are also excluded.

“This event has much in common with the central European floods of 2013, and not just because it fell on the same days in the year. May 2024 was among the wettest months recorded in southern Germany,” said Daniel Bernet, Moody’s Assistant Director, Model Product Management.

He continued: “Soils were fully saturated after the initial heavy rainfall on May 28 and May 30, the more prolonged rainfall associated with a typical Vb-type event then led to widespread flooding in southern Germany.

“Even the insured losses from 2013 and the current events are in the same range when trending the 2013 losses to today. In Baden-Württemberg, given the flood insurance take-up rate is as high as 94 percent, most of the residential losses will be covered. Unfortunately, this high level of coverage is not the case in Bavaria where the flood insurance take-up rate is 47 percent.”

Concluuding: “Similarly, properties will not be covered for direct ground-water intrusions, a frequently observed phenomenon during the 2013 event.

“From a flood modeling perspective, the 2013 and 2024 events again highlight how important it is to appropriately capture key elements such as antecedent conditions, Vb-type events, cross-country correlations, flood defenses, and combined fluvial and pluvial flooding.”

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