Moody’s RMS Event Response Estimates Insured Losses in Germany from the Central Europe Floods Will Likely Range Between €2.0 to €3.0 billion (US$2.1 to US$3.2 billion)

Moody’s RMS Event Response Estimates Insured Losses in Germany from the Central Europe Floods Will Likely Range Between €2.0 to €3.0 billion (US$2.1 to US$3.2 billion) 150 150 Haggie Partners

Moody’s RMS™ Event Response estimates that insured losses from the Central Europe floods between Thursday, May 30 and Monday, June 3 in Germany will likely fall within the range of €2 billion to €3 billion (US$2.1 billion to US$3.2 billion).

This loss estimate is based on an analysis of the flooding using Moody’s RMS™ Europe Inland Flood HD Models reflecting insured property damage, spoiled contents, and business interruption across residential, commercial, industrial, agricultural property, and automobile lines.

It also considers sources of post-event loss amplification (PLA), recent inflationary trends, exposure growth, and increases in insurance take-up. The estimate does not include insured losses to non-modeled exposures such as transport and utility infrastructure lines of business, or crops.

The estimate includes insured losses for southern Germany, which is expected to constitute most of this event’s loss, and excludes losses from flooding in Switzerland, Austria, Czechia, Hungary, and Italy as contributions from these countries are anticipated to be minimal. It also excludes any potential losses from subsequent flooding further downstream and/or triggered by renewed precipitation.

Heavy and persistent rainfall fell across central European areas between Tuesday, May 28, and Monday, June 3 as a series of low-pressure systems slowly crossed and remained over central Europe for several days.

Low-pressure systems with trajectories from the Mediterranean and across central Europe are also known as Van Bebber (Vb-type) cyclones, and have been responsible for some of the most severe central and east European flood events, such as the well-known 2002 and 2013 floods.

An initial period of heavy rain on Tuesday, May 28 was followed by a more prolonged period of heavy rain mainly focused on southern Germany between Thursday, May 30, and Monday, June 3, with several areas observing rainfall amounts greater than their monthly averages. This led to widespread flash and river flooding, initially of smaller rivers across southern Germany (mainly in Baden-Württemberg and Bavaria), with the Danube River later reaching flood stage in several locations as the floodwater from the headwater catchments accumulated downstream.

Daniel Bernet, Assistant Director, Model Product Management, Moody’s:
“This event has much in common with the central European floods of 2013, and not just because it fell on the same days in the year. May 2024 was among the wettest months recorded in southern Germany. Soils were fully saturated after the initial heavy rainfall on May 28 and May 30, the more prolonged rainfall associated with a typical Vb-type event then led to widespread flooding in southern Germany.

Even the insured losses from 2013 and the current events are in the same range when trending the 2013 losses to today. In Baden-Württemberg, given the flood insurance take-up rate is as high as 94 percent, most of the residential losses will be covered. Unfortunately, this high level of coverage is not the case in Bavaria where the flood insurance take-up rate is 47 percent.

Similarly, properties will not be covered for direct ground-water intrusions, a frequently observed phenomenon during the 2013 event. From a flood modeling perspective, the 2013 and 2024 events again highlight how important it is to appropriately capture key elements such as antecedent conditions, Vb-type events, cross-country correlations, flood defenses, and combined fluvial and pluvial flooding.”

About Moody’s
In a world shaped by increasingly interconnected risks, Moody’s data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities.

Moody’s shapes the world’s view of risk for insurers, reinsurers, financial services organizations, and the public sector, with Moody’s RMS models underlying the nearly US$2 trillion Property & Casualty industry. We empower organizations to evaluate and manage global risk from natural and man-made catastrophes, including hurricanes, earthquakes, floods, climate change, cyber, and pandemics.

With a rich history of experience in global markets and a diverse workforce in more than 40 countries, Moody’s gives customers the comprehensive perspective needed to act with confidence and thrive.

Visit Moody’s Insurance to learn more and follow us on LinkedIn and Twitter.