The German Insurance Association (GDV) estimated insured losses at approximately €2 bn. PERILS, an independent Zurich-based provider of catastrophe insurance data, has released its third insurance industry loss estimate for the floods that hit southern Germany from May 31 to June 6, 2024. The loss is now estimated at $1.58 bn, a slight revision from previous estimates of $1.57 bn and $1.59 bn.
The losses are primarily from property damage, with personal property accounting for 60% of the total, while commercial property represents 40%. Most of the losses occurred in Baden-Wüerttemberg and Bavaria, which together make up over 95% of the total.
The report provides a detailed breakdown of property losses by two-digit postal codes (low-resolution CRESTA Zones). Losses are categorized by residential, commercial, and industrial property, with further segmentation into buildings, contents, and business interruption.
This data, combined with the PERILS flood exposure database for Germany, offers deeper insights into property risk from flooding in the region (see how Severe storms & flooding impacted for insured losses in Central Europe).
Southern Germany Experienced Severe Flooding
In late May and early June 2024, southern Germany experienced severe flooding, particularly in the states of Bavaria and Baden-Württemberg. Persistent heavy rainfall led to rivers overflowing, causing widespread damage and necessitating mass evacuations (see how Increasing Consumer Awareness Will Drive Private Flood Insurance Growth).
Thunderstorm activity across various European regions may add tens of millions more in losses. Insurers have already faced significant flood-related claims in Germany this year.
In December, floods affected northern and central Germany, while May floods hit Saarland and Rhineland-Palatinate.
Moody’s RMS estimates that insured losses in Germany from the Central Europe Floods will likely range from €2 bn to €3 bn.
Heavy rainfall between May 28 and June 3 caused significant flooding in central Europe, especially in Germany.
Southern Germany experienced intense rain from May 30 to June 3, resulting in widespread flash and river flooding.
Initial flooding affected smaller rivers in Baden-Württemberg and Bavaria. The Danube River also reached flood stage as water accumulated downstream.
Moody’s latest loss estimate includes insured property damage, spoiled contents, and business interruption across residential, commercial, industrial, agricultural, and automobile sectors.
Human Impact
The floods resulted in at least six fatalities. In Bavaria, a firefighter died during a rescue operation when an inflatable raft capsized. Another firefighter went missing under similar circumstances. Additionally, a 79-year-old woman was found dead in a canal near Augsburg after being reported missing. Thousands of residents were evacuated as floodwaters inundated homes and infrastructure.
Infrastructure Damage
The floods caused significant disruptions to transportation networks. Major railway lines, including routes to Munich, were affected, leading to widespread delays and cancellations. In some areas, roads became impassable due to high water levels, hampering rescue and relief efforts. The automotive industry also faced challenges; for instance, production shifts at Audi’s Ingolstadt plant were halted due to the flooding.
Government Response
In response to the disaster, the German government emphasized the importance of addressing climate change, linking the increasing frequency of such extreme weather events to global warming. Chancellor Olaf Scholz and Economy Minister Robert Habeck visited the affected regions, underscoring the need for enhanced climate resilience and mitigation strategies.
While the 2024 floods were devastating, they were not unprecedented. Germany has experienced several significant flood events in recent decades, including the Elbe Floods of 2002, the Summer Floods of 2013, and the Ahrtal Floods of 2021.
Each of these events resulted in substantial economic losses and highlighted the country’s vulnerability to such natural disasters.
Insurance Loss Drivers and Comparisons
The floods, caused by prolonged heavy rainfall from a Mediterranean weather system known as “Vb,” impacted large areas of Baden-Wuerttemberg and Bavaria. This weather pattern is notorious for triggering extreme rainfall and floods in Central Europe.
While significant, the $1.58 bn loss is not unprecedented. Larger floods in Germany include the Elbe Floods (August 2002), Summer Floods (June 2013), and Ahrtal (Bernd) Floods (July 2021). Based on a 24-year flood loss history, an event of this magnitude occurs about once every five to six years.
Insurance industry loss footprint
Insurance industry loss accumulated rainfall
Flood Insurance Coverage and Industry Response
Luzi Hitz, Product Manager at PERILS, highlighted the disparity in flood insurance coverage between regions.
According to the German insurance association, only 47% of residential buildings in Bavaria have flood insurance, compared to 97% in Baden-Wuerttemberg. In both regions, however, the insurance industry managed the losses efficiently and effectively with limited disruption – and as Baden-Wuerttemberg demonstrates, establishing a very high level of flood
insurance penetration is possible.
Hitz noted that the industry challenge is less about improving the insurance product or raising more risk capital. Instead, it revolves around encouraging more homeowners to purchase flood insurance, as demonstrated by the high coverage rates achieved in Baden-Wuerttemberg.
The detailed loss data and exposure analysis from PERILS offer valuable insights for insurers, reinsurers, and risk managers, helping to better assess and manage flood risks in Germany.
FAQ
The German Insurance Association (GDV) estimated insured losses at approximately €2 bn. PERILS, a Zurich-based provider of catastrophe insurance data, reported a third industry loss estimate of $1.58 bn, revising earlier estimates of $1.57 bn and $1.59 bn.
The floods primarily impacted the states of Baden-Wuerttemberg and Bavaria. These two states accounted for more than 95% of the total insurance industry loss. Smaller rivers and the Danube also contributed to the flood damage.
The floods were triggered by prolonged heavy rainfall caused by a Mediterranean weather system known as “Vb.” This system brought moisture-laden air to Central Europe, resulting in extreme rainfall. Heavy rains from May 28 to June 3, 2024, caused flash floods and river overflows, particularly affecting smaller rivers before eventually impacting the Danube.
The floods severely disrupted transportation networks, with major railway lines, including routes to Munich, experiencing delays and cancellations. Roads were rendered impassable due to high water levels, affecting rescue and relief efforts. The automotive industry was also impacted, as Audi’s Ingolstadt plant had to halt production shifts.
The insurance losses were split into personal property (60%) and commercial property (40%). PERILS provided a detailed breakdown of the affected properties by two-digit postal codes (CRESTA Zones). Losses were further classified by property type (residential, commercial, and industrial) and by damage type (buildings, contents, and business interruption).
The 2024 flood, with an estimated loss of $1.58 bn, is significant but not unprecedented. Germany has experienced larger floods, such as the Elbe Floods (2002), the Summer Floods (2013), and the Ahrtal Floods (2021). Historical data indicates that flood events of this scale typically occur every five to six years.
Flood insurance coverage varies significantly between the two states. In Baden-Wuerttemberg, 97% of residential buildings have flood insurance, while in Bavaria, only 47% of homes are insured for flood risks. Despite these differences, the insurance industry managed the claims process efficiently, demonstrating the potential for higher flood insurance penetration in Bavaria.
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AUTHOR: Luzi Hitz – Chief Executive Officer of PERILS, Edited by Nataly Kramer
