German reinsurance firm Deutsche Rück has said that its retrocession program will be triggered and protect its balance-sheet against some of the financial impacts of the recent severe flooding in Germany.
Deutsche Rück has estimated a net loss of between €40 and €50 million from the damage caused by heavy rainfall and severe flooding.
The devastating impacts were caused by the low-pressure system known as Bernd, with losses particularly concentrated in North Rhine-Westphalia and Rhineland-Palatinate, and later in south-eastern Bavaria and parts of Saxony, thee reinsurer explained.
As a result, Deutsche Rück has produced this initial loss estimate, which it calls moderate.
But on a gross basis, the reinsurance firm expects its loss exposure to the event will be from €180 million to €230 million Euros, meaning the company anticipates a retrocession recovery of between €140 million and €180 million Euros.
“Based on initial claims and our own modelling, as one of the largest reinsurers on the German market we are taking a corresponding hit from the effects of storm Bernd,” explained Deutsche Rück CEO Frank Schaar.
“Thanks to our retrocession structure, which is tailor-made for such events, we expect a net loss of 40 to 50 million euros after relief from our reinsurance cover,” Schaar added.
“In view of our solid asset base, we estimate the net loss impact on our company to be moderate. Our thoughts are especially with the relatives of victims and people who are missing. We are truly appalled that so many people are having to endure suffering and loss, so I am all the more grateful to our staff for their donations and for using their paid leave to lend a hand and provide practical help in the disaster area.”
Deutsche Rück is just the latest major German re/insurance player to reveal it is expecting support from reinsurance partners in paying claims for the devastating flood catastrophe.
Earlier this week we reported that, European insurer Generali also expects to recover from its reinsurance partners for the recent storm and flood losses in Europe.
In addition, insurer AXA said that it estimates that losses from July’s floods that hit Germany, Belgium, and other parts of Western and Central Europe, will be around EUR 400 million, which it reported before tax and net of expected reinsurance recoveries.
Hannover Re said yesterday it is anticipating a net loss of up to EUR 250 million from the recent severe flooding across Europe and in particular Germany.
While Swiss Re said it expects mid-triple digit millions of losses from the flooding and South African riots.