The German Insurance Association (GDV) has again increased its estimate of the insured cost of the catastrophic damage caused by recent depression Bernd and subsequent flooding, up to a total of €7bn.
The total economic cost will be far higher as only 46% of German residential buildings have protection against floods and heavy rain.
The association said that, together with its member companies, it will present ideas by autumn on how the spread of natural hazard insurance can be significantly increased at risk-based prices.
The GDV added that German insurers support a new overall concept for climate change adaptation, consisting of education, binding measures for private and state prevention, and insurance.
Two weeks ago, the association said that it predicted the total loss would be in the range of €4.5bn to €5.5bn. Last week, the GDV upped its forecast, stating that it would likely hit the upper €5.5bn range. Now, the association has said that analysis of the losses suggests the total insured cost will be more like €7bn.
Together with the hail damage in early summer, 2021 will probably be one of the most expensive natural hazard years for insurers, said the association.
“We are now expecting insurance losses of about €7bn,” said Jörg Asmussen, general manager of the Berlin-based GDV.
The association estimates that about €6.5bn of the total will be attributable to residential buildings, household items and businesses, and about €450m to motor vehicles. “The dimensions of this extreme event only become apparent as claims are recorded and settled,” said Mr Asmussen.
German insurers are currently assuming about 250,000 claims – including 200,000 on houses, household effects and businesses, and up to 50,000 on motor vehicles. “The insurers continue to work under high pressure to quickly help those affected,” said Mr Asmussen.
Bernd is the most damaging natural disaster in Germany to date. The storm front swept across large parts of Germany on 13-18 July. Heavy rain and floods caused severe damage in the low-pressure area, especially in Rhineland-Palatinate and North Rhine-Westphalia, but also in Bavaria and Saxony.
The total economic cost of the storm damage will be far higher than the estimated €7bn insured loss, because not all buildings are insured against all natural hazards. The GDV pointed out that while almost all residential buildings nationwide are protected against storms and hail, only 46% have protection against other natural hazards such as heavy rain and floods.
“Together with our member companies, we will be presenting ideas by autumn on how the spread of natural hazard insurance can be significantly increased at risk-based prices,” explained Mr Asmussen. “It is also important to reach those who, despite the recent flood disaster, do not want to believe that they too can be affected by natural hazards.”
The GDV added: “In addition, everything must be done to prevent damage through protective measures or at least to significantly reduce its extent.”