European flooding to cost insurance industry up to $4.5 billion: Swiss Re

Global reinsurance firm Swiss Re has published an estimate of its own losses from the recent central and eastern European flooding events and provided an estimate of the insured loss total for the industry as well. Swiss Re estimates its own losses to be approximately $300m, net of retrocession and before taxation.

Swiss Re’s statement says that the high water levels along major central and eastern European rivers, affecting large swathes of Germany, Austria, the Czech Republic, Hungary and Slovakia, are expected to generate insurance industry losses of between $3.5 billion and $4.5 billion. At the same time, it expects its own losses to be around the $300m mark.

Michel M. Liès, Swiss Re’s Group Chief Executive Officer, said; “The flooding in central and eastern Europe has again caused hardship and loss to many communities and we send our sympathies to those affected. Swiss Re will continue to work closely with our partners and clients to ensure that people receive the financial support they need to clean up and rebuild after this flood.”

Swiss Re notes that flood prevention measures, such as mobile flood barriers erected in the Czech city of Prague, have reduced the final insured loss total considerably and saved large areas from much more devastating impact.

Matthias Weber, Swiss Re’s Group Chief Underwriting Officer, commented; “Thanks to timely prevention measures, large areas have been saved from the flooding. With the right prevention measures in place, insurers can offer more affordable coverage, which means that more people and businesses can benefit from insurance.”

Swiss Re’s insurance industry loss estimate of up to $4.5 billion for all affected European countries is lower than the early estimates issued by risk modelling firms and rating agencies.