Flood Damage in Central Europe Causes $22B in Economic Loss: Aon

Major flooding continued across Central Europe during the first half of the month, killing at least 23 people and resulting in combined economic losses of up to $22 billion, and insured losses tentatively estimated at approximately $5.3 billion, according to the latest edition of the Global Catastrophe Recap issued by Impact Forecasting, the catastrophe model development center at Aon Benfield.

The latest report reviewed the natural disaster perils that occurred worldwide during June 2013.

The majority of flood damage occurred in Germany, Czech Republic, Austria, Slovakia, Hungary, and Switzerland after major rivers burst their banks, including the Danube, Vltava, Rhine, Main, and Neckar.

Unprecedented flooding also impacted Canada’s Alberta Province following significant rainfall at the end of June, killing at least four people and prompting state of emergency declarations in 27 communities.

Calgary sustained extensive damage after the Bow and Elbow rivers burst their banks and flooded the downtown region, while other towns, including Medicine Hat, Canmore, Banff, and High River, were also heavily damaged.

Total economic losses were estimated at around $3.8 billion – one of the costliest flood events in Canada’s history. Preliminary insured loss estimates were cited at more than $1.0 billion.

Monsoon rainfall inundated northern India and Nepal, triggering massive flooding and landslides that left at least 5,000 people dead or missing, and caused catastrophic damage, especially in the Indian state of Uttarakhand.

Much of the damage occurred along the Ganges, Yamuna and Ghaghara rivers and their tributaries as tens of thousands of homes, businesses and other structures were washed away.

Total economic losses were cited as more than $1.1 billion, with insured losses expected to reach $500 million.

Steve Jakubowski, President of Impact Forecasting, said: “Flooding is becoming an increasingly expensive and devastating peril globally, and we continue to work with our clients to help them understand and manage their exposures. We have now developed flood models for six European countries with significant flood risk, and also for the U.S. and Thailand, which are helping insurers and reinsurers to manage their aggregated exposures in these regions. Aon Benfield’s experts are also working with the British government and the Association of British Insurers (ABI) to help formulate and implement a solution that will address the future challenges of insuring flood risk in the United Kingdom.”

Meanwhile, severe weather tracked across the central and eastern United States throughout June, causing at least six deaths and widespread damage. The inclement weather included at least two derecho events that spawned damaging straight-line winds across several states.

The total June economic cost of severe thunderstorms was expected to exceed $1.0 billion, with insured losses in excess of $500 million.

In Europe, powerful thunderstorms resulted in tornadoes, straight-line winds, and flash flooding across parts of France, Spain and Switzerland during the month.

In France, severe damage was recorded in several departments including Hautes-Pyrenees, Pyrenees-Atlantiques and Côte-d’Or, with economic losses estimated at $655 million. In Switzerland, insured losses from severe weather in an area from Geneva to Laussane and the Jura to Neuchatel was estimated at $214 million.

Additional severe weather occurred in Sri Lanka, China and South Africa.

The Black Forest Fire became the most damaging fire in Colorado’s history, killing two people, charring 14,280 acres (5,778 hectares) of land, and destroying at least 511 homes. Insurers received at least 4,500 claims, resulting in payouts in excess of $350 million. Dozens of destroyed homes were uninsured or underinsured, which will push the overall economic loss beyond $500 million.

Two Atlantic tropical storms made landfall in June, including Tropical Storm Andrea that came ashore in Florida’s Big Bend region and tracked along the U.S. East Coast, causing minimal damage.

Tropical Storm Barry made landfall in Mexico, killing at least three people. Flood damage was also prevalent in Mexico, Belize and El Salvador.

Tropical Storm Bebinca made separate landfalls in China and Vietnam, causing $45 million in agricultural losses.

A strong winter storm brought heavy snow, rain and gusty winds across parts of New Zealand. The Insurance Council of New Zealand anticipated insured losses to be in the region of $31 million.

Source: Aon Benfield