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Recent widespread flooding in Germany could result in insured losses of more than €1 billion ($1.14 billion), Fitch Ratings Ltd. said Tuesday.
Fitch said claims of that scale would weaken the underwriting profitability of German insurers, but likely would not affect their credit profile.
The rating agency said losses of €1 billion would equal the entire expected natural catastrophe losses this year for German insurers, “although excess-of-loss reinsurance cover will cushion the impact.”
Fitch also altered its estimate of the German nonlife insurance sector’s combined ratio to 94% from a previous expectation of 91%.
Thunderstorms and floods have hit areas of central and southern Germany as well as Belgium, Switzerland and France, where the River Seine in Paris broke its banks.
“The fact that a single weather system has caused flooding in at least four countries shows the complexity of single flood events” that can drive “large losses,” said Maurizio Savina, meteorologist and senior product manager of Europe flood models at Risk Management Solutions Inc. in a commentary.
“About 25% of European floods affect more than one country at the same time,” Mr. Savina said. “We have calculated that around 80% of the 200-year European loss is due to such flood events with typical inundation length lasting for at least three weeks.”
The Insurance Council of Australia has said that the recent east coast storms have cost the nation's insurance industry over $56 million Australian ($41 million), reports SBS.