July floods “most expensive” disaster ever for Luxembourg insurers

The July flooding that ravaged parts of Europe has been declared the “most expensive disaster in the history of Luxembourg insurance”.

An update from the Luxembourg Insurance and Reinsurance Association (ACA) has estimated the total cost at €125m. The association also stated that it had received about 6,500 claims for damage to homes and businesses, and 1,300 for vehicle damage.

As of mid-October, about 80% of vehicle claims had been paid in full while 85% of home and business claims had been met, although only partially in some cases.

According to the ACA’s statement, a number of factors had contributed to the delay in compensation, including incomplete appraisals, lags on invoice payments and supply chain issues in securing the materials needed for repairs.

The floods, the worst in the Duchy’s history, hit Luxembourg on 14-15 July, when water levels reached historic highs.

Belgium and Holland, as well as Germany, were also affected. According to Cresta, the standards body for aggregating catastrophe industry losses, the floods generated the largest loss event for insurers so far this year.

Cresta’s current estimate is €9.47bn. Swiss Re has a slightly higher loss estimate of €12.3bn. Both are a significant increase on the August estimate released by catastrophe modeller RMS, which stated that insured losses would range between €5bn and €6bn.

In Belgium, flood damage is expected to surpass €2bn but damage to buildings has been estimated at about €125m. Furthermore, in September the Belgian government announced an agreement with insurers to reimburse 100% of all insured victims, through the Flemish Disaster Fund.

“The floods of July have hit the whole country hard. We need to combine all our efforts to help the victims recover,” said Brussels minister-president Rudi Vervoort at the time.

“This agreement between the Brussels region and the insurance sector will offer 100% compensation to all insured victims without any additional special administrative formalities,” he added.