Insured losses from the flooding in Germany will remain under €1 bn if the flood dykes hold

The insured losses from the recent flooding in various regions of Germany are expected to remain under €1 bn if the flood dykes hold, as per Onnen Siems, the Managing Director of Meyerthole Siems Kohlruss (MSK).

Siems has highlighted that while the situation remains tense with some dykes being softened, the water levels are gradually falling. The uncertainty about whether the dykes will withstand the pressure persists.

Siems also sheds light on the insurance coverage in Lower Saxony, noting that only about 30% of houses in this region are insured against natural hazards.

This low percentage is attributed to the subjective perception of risk by the residents. Furthermore, past major flood events in Europe, such as those in 2002 and 2013, were caused by heavy summer rains and affected different regions, causing substantial insurance losses.

Insured losses from the flooding in Germany will remain under €1 bn if the flood dykes hold

These past events saw significantly higher damages, with inflation-adjusted figures amounting to €3 billion in 2013 and €6 billion in 2002.

Siems, along with Dr. Stephanie Fiedler, who advises MSK on meteorological issues, points out that the current flooding is a result of extreme weather conditions prevalent in winter.

Siems highlighted that in Lower Saxony, only around 30% of houses are insured against natural hazards.

One reason for this could be the subjective perception of risk. As the risk of a storm surge is not usually covered by insurance, natural hazards insurance may appear less attractive to many people in Lower Saxony

Onnen Siems, the Managing Director of Meyerthole Siems Kohlruss

“Although the risk of flooding, which is the issue in this case, is usually covered by natural hazard insurance, it is often not seen as an acute threat,” Siems explained.

Insured losses from the flooding in Germany

Warmer temperatures lead to more water vapor in the atmosphere, which then results in rain rather than snow, causing direct increases in water levels.

The Intergovernmental Panel on Climate Change has also indicated that such extreme rainfall events are expected to become more frequent and intense with global warming.

The calculation of insurers’ deductibles for the current floods is complex and depends on several factors, including the nature of the loss and the duration over which it occurs.

These insights provide a crucial understanding of the potential financial impact of the flooding on the insurance industry, as well as the broader implications of climate change on weather patterns and natural disasters.

About the flooding situation in Germany

The flooding situation in Germany as of early 2024 has been severe, particularly affecting many states after prolonged heavy rain. The state of Lower Saxony has been particularly hard-hit, with rising water levels in rivers and canals, leading to endangered dikes and the risk of widespread flooding.

In some areas, emergency services have had to implement measures to control the water levels, including the deployment of volunteers to build dikes and the use of mobile dike systems.

Due to the ongoing and intense rainfall, the soil in many regions has become saturated, unable to absorb more water, thus increasing the risk of flooding. In some places, local authorities and residents have had to prepare for potential evacuations.

The emergency response has included coordinated efforts between various services, including Germany’s Armed Forces and aid organizations. Up to 900 helpers can be mobilized in an emergency situation.

Meteorological forecasts have indicated the possibility of more rain, which means that the flood risk is still a significant concern. The longer the floodwater presses against the weakened dikes, the higher the risk of a breach.

This situation has put considerable pressure on local authorities and residents as they work to contain the floodwaters and protect their communities.

The flooding has caused disruptions in daily life, including school closures and transport issues, and has necessitated significant efforts to prevent further damage and ensure safety. The situation remains dynamic, and authorities are closely monitoring the developments and responding as needed.

Yana Keller   by Yana Keller