Insured losses from Central Europe floods seen at up to $3.4bn by Verisk

Global data analytics and technology provider, Verisk’s Extreme Event Solutions arm has estimated that insured losses from September flooding in Czechia, Poland, and Austria will land between $2.2 billion (€2bn) and $3.4 billion (€3bn).

From September 12th to 16th, severe flooding driven by an extreme amount of rain impacted large parts of Central Europe. This weather event was caused by a Vb weather system, an unusual setup which can result in significant extended periods of rainfall and flooding.

This estimated insured loss range includes physical damage to property (residential, commercial, industrial, auto, agriculture), structures and their contents, from both on and off-floodplain flooding, and also includes additional living expenses for residential claims and business interruption for commercial claims.

As well as the countries mentioned above, parts of Germany, Hungary, Romania, Slovakia, and Italy also experienced mild to moderate flooding impacts from this event, although Verisk’s estimate only includes Czechia, Poland, and Austria.

The up to $3.4 billion range also excludes losses to uninsured properties and infrastructure, losses from extra-contractual obligations, hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event, as well as demand surge and other non-modelled losses.

The slice of the total economic loss from this event covered by insurance will vary by country. Verisk’s Extreme Event Solutions highlights the relatively high take-up of flood insurance in both Austria and Czechia, but notes that lower flood limits, notably in Austria, may offset this somewhat. In Poland, the majority of commercial risk is covered by insurance, but only a small portion of homes and autos have flood protection.

The damage caused by this event is significant, with the Polish Prime Minister’s office reporting at least 11,500 residential buildings, both single-family homes and multi-unit structures, either flooded or damaged, as of September 19th. On top of this, over 6,000 agricultural and commercial buildings, as well as 700 public-use structures, were damaged or submerged.

During the week of September 22nd, the Czech Insurance Association reported that more than 60,000 claims had been received by Czech insurers so far, with around $850 million (€770m) in insured losses. Interestingly, the association reported that around three-fifths of those claims are related to business insurance.

In Austria, Verisk notes that Vienna was spared major impacts by retention basins designed to protect the city, but the surrounding region of Lower Austria experienced catastrophic impacts, mostly from the River Wien, a tributary of the Danube.

This estimate from Verisk is higher than others that have been reported, with reinsurance broker Guy Carpenter saying last week that insured losses would likely fall in the €1.6 billion to €2.1 billion range, while broking group Aon pegged losses at €1.65 billion.

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