European flood toll turns into cash torrent
Saturday 17 August 2002
Insurance companies are beginning to count the cost of the flooding that has swept across Europe in the past week and are expecting the overall bill for damages to run to billions of euros.
Munich Re, the world's biggest reinsurer, said the total cost of flooding damage is likely to be more than €1bn (£640m).
Allianz, Europe's biggest insurer chaired by Henning Schulte-Noelle, is understood to be facing losses running into tens of millions of euros alone. This is much higher than the loss caused by the flooding of the River Oder in east Germany five years ago, when the Munich-based insurer had to cover claims of about€6.5m.
A spokesman for Allianz said it was still too early to assess damages from the current flooding, as many policyholders are still in emergency accommodation and have yet to start bailing out their flooded homes.
The damages are likely, however, to be substantially higher than losses incurred in 1997. A double-digit figure in the millions of euros is expected.
Much of the flooding has taken place in the south-east of Germany. Yesterday waters from the River Elbe were rising on the city of Dresden, in Saxony, where 30,000 people have already been evacuated.
Chancellor Gerhard Schröder, has called the flooding a national catastrophe and said four million people have been affected. He has made €100m available to help the rescue effort.
Allianz, which has 20 million policyholders in Germany, is particularly exposed to claims in eastern Germany as it took over the home and contents insurance of about three million people from the former state insurer.
It is bracing itself for a substantial number of claims and said a first loss estimate should be available next week. Shares in Allianz in London closed down 3 per cent at 7,936p.
A spokesman for Allianz said: "We are not yet able to release a specific figure because many of our customers are still unable to tell us how big the damage is. We do have a lot of policyholders in east Germany. The flooding there is tremendous."
Munich Re, however, said insured losses will only account for a small proportion of the total bill. It is waiting for waters to subside before it will give a gauge of its own losses. A spokesman for the company played down the scale of the potential claims and said pictures did not give a true impression of the damage to insured property.
"This is more of a regional phenomenon than something that is concerning the whole public," a spokesman for Munich Re said. "The insured loss will be a relatively small part of the total damage."
Analysts said loss estimates are likely to fall short of the amount eventually paid out, as it often takes weeks for claims to be made. But the losses are unlikely to have a huge impact on the capital base of large insurers such as Allianz, as this is the first major natural catastrophe they have experienced this year.
William Hawkins, an insurance analyst at Fox Pitt Kelton, said: "In the context of limited natural catastrophe losses to date, this particular event is likely to be well within the budget of most insurers."
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...