Flooding and severe storms across Europe during November are expected to drive multi-billion economic losses across the region, with insurers likely to pick up a reasonable proportion of the bill.
Insurance and reinsurance broker Aon’s catastrophe risk modelling unit Impact Forecasting explained that Italy alone is expecting an economic impact in the region of US $2 billion from flooding and storms, but across western and southern Europe during the month of November more periods of severe weather and rainfall also drove significant economic impact.
Aon’s unit explains that an active stretch of cyclonic weather caused significant flooding and severe weather in parts of Italy.
In particular, the historic center of Venice was flooded on November 12th as the second highest tide on record since 1923 struck the city, while a continued pattern of flooding and severe weather from November 11th to 19th drove additional impacts across Italy and also parts of Austria.
Economic losses, including the effects of tidal flooding in Venice, are estimated to reach at least US $1.9 billion, while Austrian insurers have cited losses well into the tens of millions of Euros.
The southern region of France was also hit by flooding during the month, while Italy and England also experienced storm driven flooding rainfall in November, causing additional combined economic losses that are expected to reach above US $1 billion, Aon explained.
The flooding in Venice alone could end up driving a relatively significant insurance and perhaps even reinsurance market loss, especially once any claims for business interruption are factored in for lack of access to the historic center of the city and lost tourism revenues.
Michal Lorinc, Catastrophe Analyst within Aon’s Impact Forecasting team, commented on the influecnce of flooding on re/insurers in November, “Despite a costly November resulting from major flooding events in the UK, France, Italy and Austria, European insurers have generally endured manageable losses thus far in 2019.
“The flood peril has also recently been active across East Africa as excessive rainfall and flooding has led to significant humanitarian impacts. The issue of financial maturity remains an important topic in different parts of the world. The insurance industry is expected to play an even more integral role in helping to introduce sustainable and tailored products and solutions to further promote resilience and preparedness.”
Flooding affected other parts of the world including Canada, where economic losses from an outbreak of severe storms and flooding drove economic losses estimated at US $275 million, and Colombia where heavy rains have led to 20 fatalities and thousands of properties damaged by floods and landslides.
In addition, Australia suffered losses from two perils during November, as wildfires continued to burn in New South Wales and a severe hailstorm struck Queensland.
As of November 22nd the wildfires had driven at least 1,525 insurance claims, with insured losses estimated at AU $165 million (US $112 million).
The hailstorm in Queensland is estimated to have caused almost 16,000 insurance claims and driven losses of at least AU $120 million (US $85m).