Storm Boris’s torrential rains and flooding likely caused more than €1.5 bn in insured losses in Central Europe, according to an Aon report. Reinsurers anticipate limited impact from Storm Boris flooding. Gallagher Re estimated insured losses will amount to between €2 bn and €3 bn.
Storm Boris could give rise to some of the worst flood losses for decades in central and eastern Europe for insurers like PZU, VIG, UNIQA, Generali and Allianz, according to a report from Bloomberg Intelligence (BI).
Flooding that killed 24 people in Central Europe earlier this month was caused by rainfall made twice as likely by human-induced climate change, a group of scientists said.
Storm Boris stalled over Central Europe from 12 to 16 September, inundating Poland, Romania, Slovakia, Austria, Czechia, Italy and Germany with torrential rain. Thousands of people have had to leave their homes as buildings were swept away, bridges collapsed and infrastructure was damaged.
Global natural disaster losses in the first half of 2024 reached $120 bn, down from 2023, which saw $140 bn in losses due to a severe earthquake in Turkey and Syria, according to Beinsure Report.
It termed damage significant in parts of the Czech Republic, Poland, and Austria, with additional impacts in Slovakia, Romania and elsewhere from historic rainfall.
The event was forecast well in advance, “which allowed for ample preparations, revision of warning systems, evacuation plans and effective water management in order to make the most of the retention capacity of existing reservoirs.”
As of September 20, ICEYE have delivered six flood analysis reports for Poland and three for Austria. Based on our latest data release for Poland and Austria on the Esri ArcGIS platform, we estimate that over 20,000 buildings in the South of Poland and at least 5,000 buildings in Austria may be impacted by the flooding.
The image gallery below shows a selection of ICEYE flood extent and depth visuals, taken from our sixth data release for Poland and the third release for Austria in Esri ArcGIS.
Torrential rainfall, about 20 inches in parts of Jeseníky Mountains, fell in the Czech Republic.
Most buildings in the country are insured against flood, Aon said. The national insurance association initially estimated 17 billion Czech koruna ($750 mn) in total insured losses, between residential and commercial/industrial claims.
With parts of the Czech Republic, Poland, Austria, Slovakia, Hungary and Romania submerged, flood losses like those in 1997, 2002 and 2013 are possible that cost €2-€4 bn in 2023 values.
Charles Graham, Senior Insurance Analyst at BI, commented: “Torrential rain over Sept. 12-16 wreaked by storm Boris has brought widespread flooding to parts of central and eastern Europe which threatens to cost as much as the catastrophic floods of 1997, 2002 and 2013. With flood waters yet to recede, and other areas at risk as water flows downstream, it will be some time before the full cost can be assessed.
“Many areas have experienced exceptional rainfall in the past two years, suggesting that there may be a link between the increased severity of convective storms and rising sea-surface temperatures in the Mediterranean.
The nonlife insurance markets in central Europe are highly concentrated and dominated by just a few insurers led by VIG, UNIQA, Generali and Allianz. In Poland, PZU is the sector’s leader, followed by Warta (Talanx) and Ergo Hestia (Munich Re).
UNIQA and VIG have the most exposure to recent floods, given their leading positions in Austria and a number of the affected countries, while PZU has a dominant market share in Poland.
Countries affected by the floods account for 80% or more of these companies’ nonlife revenue. The relative exposures of Generali (at 15%) and Allianz’s (5%) are far less, even though both have large market positions in some of the beset countries.
Extreme rainfall totals led to a disaster declaration in Lower Austria. In the St. Pölten district multiple water courses overflowed their banks and several dams broke, Aon said, and notable damage and disruption was reported in Vienna because the Wien River overflowed its banks.
The share of the economic costs of the floods paid by the insurance industry will vary by country. In Austria and the Czech Republic, flood insurance take-up is relatively high, so most of the insurable loss will probably be paid out by residential and commercial policies.
In Poland, the bulk of commercial risk is covered, but only a small proportion of homes and autos are protected against floods.
In Vienna and other areas of Austria public transportation was disrupted, power outages were reported and at least 1,100 residences were evacuated.
A preliminary estimate from the Austrian insurance association put potential losses at €600 mn to €700 mn.
About 5,400 houses were flooded in Romania, where the eastern counties were hard hit, said Aon. It compared the event to previous catastrophes in multiple countries. Damage was mitigated in some areas by actions taken earlier to prevent losses from natural disaster.
by Yana Keller
