Insured losses from Central European floods range from USD 2.2 billion to USD 3.4 billion: Verisk

Insured industry losses from floods in the Czech Republic, Poland and Austria in September 2024 will range from €2 billion ($2.2 billion) to €3 billion ($3.4 billion), according to analytics and technology provider Verisk of the data.

S&P Global Ratings estimates insured losses of €2.2 billion ($2.4 billion), while Guy Carpenter estimates a market loss of between €1.6 billion and €2.1 billion ($1.8 billion – 2 .3 billion) in its flood report released on 24 September. .

Verisk analyzed the details of the event. Similar to the June floods in Europe that primarily affected Germany, the September event was caused by a so-called Vb (five-b) weather system, a relatively unusual situation that can lead to significant prolonged periods of rainfall and flooding, Verisk said.

This event spread across several European nations during September, with some of the worst impacts occurring along the border between Poland and the Czech Republic. The Polish Prime Minister’s Office reported as of September 19 that property damage was extensive, with at least 11,500 residential buildings – both single-family homes and multi-unit structures – either flooded or damaged. In addition, more than 6,000 agricultural and commercial buildings, along with more than 700 public structures, including schools, kindergartens, sports facilities, administrative buildings, bridges and roads, were damaged or submerged.

The Czech Insurance Association reported in the week of September 22 that more than 60,000 claims have been received by Czech insurers so far, with CZK 19.3 billion in insured losses (approximately EUR 770 million or USD 850 million). The report also indicated that approximately three-fifths of these claims are related to business insurance. While Vienna was spared major impacts by the retention basins designed to protect the city, the surrounding region of Lower Austria saw catastrophic impacts, mostly from the Wien River, a tributary of the Danube.

According to local authorities, flooding in this area is said to be approximately that experienced in 1,000 years on a long-term average. Parts of Germany, Hungary, Romania, Slovakia and Italy also experienced light to moderate flooding impacts from this event.

The proportion of the economic impact of this event paid by the insurance industry will vary by country, Verisk continued. In Austria and the Czech Republic, flood insurance rates are relatively high, although lower flood limits, particularly in Austria, could offset this somewhat in the eventual insured loss balance. In Poland, most of the commercial risk is covered, but only a small part of houses and cars are covered by floods.

Verisk’s loss estimates include insured physical damage to property (residential, commercial, industrial, automotive, agricultural), both structures and contents, from both in- and out-of-floodplain flooding. They also include additional living expenses (ALE) for residential claims and business interruption (BI) for commercial claims.

Verisk’s loss estimates do not include: losses in Germany or other countries not listed above; losses caused by uninsured property; infrastructure losses; losses from non-contractual obligations; losses from hazardous waste cleanup, vandalism or civil commotion caused directly or indirectly by the event; demand growth and other unmodeled losses.

Photo: A destroyed house in Jesenik, Czech Republic, Sunday, Sept. 15, 2024. (AP Photo/Petr David Josek)

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