Europe floods to cost insurers up to $4.5 billion: Swiss Re

Mon Jul 8, 2013 7:32am EDT
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By Caroline Copley

ZURICH (Reuters) - Floods in central Europe last month may cost insurance companies $3.5-4.5 billion, only half of one previous estimate but more than was paid out for the last major washout in 2002, the world's second biggest reinsurer said on Monday.

The forecast from Swiss Re compares to an earlier warning from a damage modeling agency that losses could top $8 billion. That, and its estimate of a $300 million hit for its own results, saw shares in Swiss Re and some other sector firms rise.

The flooding in early June forced Czech soldiers to erect metal barriers and pile up sandbags to protect Prague's historic centre after days of heavy rains swelled rivers and forced evacuations from low-laying areas.

Emergency workers, soldiers and volunteers worked desperately to shore up flood defenses in towns along the Danube and Elbe rivers as the high water moved downstream in the following days, with Germany among the worst-hit.

German insurance trade body GDV last week estimated the country's insurers could face damage claims of nearly 2 billion euros ($2.57 billion), slightly ahead of the 1.8 billion cost seen in the Elbe floods a decade ago.

Floods which drowned Prague's historic Old Town and other cities in water in 2002 cost insurers around $3.4 billion.

The world's biggest reinsurer, Munich Re, is due to publish its estimate of insurance industry and economic losses on Tuesday, in an overview of natural catastrophes in the first half of the year.

It will release a figure for its own share of the losses from the floods, which also hit towns in Austria, Hungary, Poland and Slovakia, with second quarter earnings data on August 6.   Continued...

File picture shows a rescue team on a dinghy evacuating a man from the flooded district of the Bavarian town of Passau, about 200 km (124 miles) north-east of Munich June 4, 2013. REUTERS/Wolfgang Rattay/Files