Floods in Central Europe could cause billions in economic losses, analysts say

The latest floods in central Europe could cause economic losses of several hundred million euros to billions of euros, according to initial estimates released on Monday, as the region braces for more damage.

Credit rating agency Morningstar DBRS estimates losses will range from a few hundred million euros to more than a billion euros ($1.1 billion), Mario De Cicco, global vice president of insurance ratings and pensions at Morningstar DBRS, in emailed comments.

Insured losses are expected to be higher in the Czech Republic, where insurance is more widespread, than in Poland, De Cicco said.

Gallagher Re, a reinsurance broker, said it was too early to give a firm estimate with rain still falling and river levels rising, but that economic losses were likely to be in the billions.

“We expect the economic costs to be measured in the billions (USD), but it will simply take time to fully assess until more clarity emerges,” said Steve Bowen, Gallagher Re’s Chief Science Officer.

The two countries are some of the hardest hit by the floods, the worst in the region for at least two decades. Austria and Romania also suffered, and at least 15 people died.

In addition to local insurance firms, large Austrian insurers – especially those active in the Czech Republic and Poland – are expected to be the most affected, De Cicco said.

Severe weather events have caused some of the biggest losses for insurers in recent years, prompting calls from the industry to do more to tackle climate change.

(1 USD = 0.8987 euros)

(Reporting by Noor Zainab Hussain and Niket Nishant in Bengaluru; Editing by Tommy Reggiori Wilkes, Barbara Lewis and Hugh Lawson)

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

TOPICS
Profit Loss Flood Europe