Floods that hit Europe in June will cause more than 12 billion euros ($15.5 billion) in total damages and at least 3 billion euros in insured losses, Munich Re (BIT:MUV2), the world's largest reinsurer, said in an emailed statement, Bloomberg News reported on Tuesday.
According to Munich Re's estimates, this year's flooding in central Europe is the most expensive natural disaster to hit the continent since the Elbe River floods of 2002. However, the payout by the insurers in this year’s flooding is expected to be more than the $3.4 billion paid by insurers in 2002, Munich Re said.
The Munich-based company’s projection is similar to the one released on Monday by Swiss Re (VTX:SREN), the world's second-largest reinsurer. Swiss Re said that June's floods may cost insurance companies $3.5 billion to $4.5 billion, and the company itself expects to face $300 million in claims.
According to these insurance firms, Germany and Austria received the heaviest rainfall, which caused the Danube, Vltava and Elbe rivers, and their tributaries, to swell and flood downstream areas, in early June.
“The frequency of flood events in Germany and central Europe has increased by a factor of two since 1980,” Torsten Jeworrek, a management board member at Munich Re, said in the statement, according to Bloomberg News. “Such a rise in losses can be prevented by better flood control.”
Munich Re said that 45 percent of the $13 billion in insured losses in the year’s first half was from inland flooding.
German insurance trade body, GDV, last week said insured damages from the flash floods could touch 2 billion euros. The other major natural disasters this year were the flash floods in India and Nepal, which killed several hundred people, the company said.
Earlier forecasts had provided higher loss estimates, but analysts caution that estimates can vary based on the type of damages that are included in the forecasts.
Catastrophe modeling firm AIR Worldwide had predicted that insurance claims for flood damage in Germany alone may be about $8 billion, according to a Reuters report.