AIR Worldwide estimates that insured losses in Germany from this month’s flooding could approach €5bn.
The cost of the floods is now converging around that figure, with the German association of insurance companies (GDV) upping its estimate to €4.5bn-€5.5bn, from last week’s €4bn-€5bn range.
AIR said the restoration of infrastructure in Germany – such as water and gas pipes, power lines and roads – could take weeks or even months and lead to loss-inflation effects.
Its estimate includes losses for insured physical damage to property structures and their consent from both on- and off-floodplain flooding.
The company said many reinsurance contracts are subject to an hours clause, typically 504 hours for flood events. Given the duration of the flood, AIR expects the event to be treated as a single occurrence in Germany.
The loss estimate doesn’t include damage in other European countries that have experienced flooding such as Belgium, Switzerland, Austria, Luxembourg and the Netherlands’ southernmost province Limburg.