Germany flood losses could push $6B: AIR

Insured losses in Germany from July flooding could reach 5 billion euros ($5.90 billion), according to a note Wednesday from AIR Worldwide, a Verisk Analytics Inc. business.

Flooding from July 13-18 from low-pressure system Bernd hit Germany’s Rhineland-Palatinate and North Rhine-Westphalia regions.

Other countries flooded included Belgium, Switzerland, Austria, Luxembourg and the Netherlands, but these countries are not included in AIR’s loss estimate.

AIR’s estimates include losses to insured physical damage to property – residential, commercial, industrial, auto, agriculture – including structures and their contents, from on- and off-floodplain flooding.

Restoring infrastructure such as water and gas pipes, power lines and roads could take weeks or months by some estimates, which could lead to loss inflation, AIR warned.

AIR used hourly precipitation fields over Germany derived from NASA’s Global Precipitation Measurement system from July 5-19 together with daily observed rainfall data from over 1,600 gauging stations from the Climate Data Center at Deutsche Wetterdienst.

River flow data from more than 900 gauging stations in the Rhine and Danube river basins in Germany obtained from country’s provincial and federal agencies was also used to calibrate and validate the modeled flows.

The Boston-based catastrophe modeling firm noted that many reinsurance contracts are subject to an hours clause – typically 504 hours for flood events. AIR expects the flood to be treated as a single occurrence in Germany given the duration of the event.

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