FRANKFURT (Reuters) - The floods that engulfed central Europe last month are expected to cost insurers about $3.9 billion and could be Germany’s costliest natural disaster on record, reinsurer Munich Re (MUVGn.DE) said on Tuesday.
The world’s biggest reinsurer said flooding affected not only Europe but also parts of Canada, Asia and Australia in the first half of the year and was responsible for nearly half of all natural catastrophe damage in that period.
Natural disasters of all types, from floods to devastating tornadoes in the United States, caused about $45 billion of economic losses, of which $13 billion were insured, Munich Re said in a review of natural catastrophes from January to June.
Flooding in central Europe was by far the most expensive catastrophe during the period, the reinsurer said.
“The final size of claims is not yet clear, but it is well possible that it will end up being the most expensive natural catastrophe in German history,” Peter Hoeppe, head of the firm’s Geo Risks Research/Corporate Climate Centre, told Sueddeutsche Zeitung newspaper on Tuesday.
The estimated $3.9 billion in insured losses from last month’s floods in Germany, Austria, the Czech Republic and other European states looks set to overtake the $3.4 billion in insured costs from major flooding along the Elbe in 2002.
Munich Re did not indicate what its own share of the losses would be, saying that it would release that data along with its second-quarter earnings report on August 6.
But the insured loss figure is in line with a forecast released by Munich Re rival Swiss Re SRENH.VX on Monday, which penciled in $3.5 billion to $4.5 billion in claims to insurers.
Economic damage from the floods in central Europe was likely to be more than 12 billion euros ($15.4 billion), Munich Re said.
The reinsurers’ forecasts were substantially lower than some early estimates of the insurance losses from the floods. One damage-modeling agency suggested losses could top $8 billion.
Reinsurers such as Munich Re and Swiss Re help insurance companies to cover the cost of heavy damage claims from disasters such as floods, hurricanes or earthquakes in exchange for part of the premiums the insurers charge their customers.
Floods have become increasingly frequent in central Europe but damage from them could be limited with better flood defenses, Munich Re said, urging cross-border cooperation and better foresight by politicians. ($1 = 0.7773 euros)
Reporting by Jonathan and Arno Schuetze in Frankfurt; Editing by Miral Fahmy and David Goodman