Verisk’s AIR Worldwide Estimates Insured Losses for July Floods in Germany Could Approach EUR 5 Billion
July 28 2021 - 12:37AM
Extreme event modeling firm AIR Worldwide estimates insured losses
in Germany from July flooding could approach EUR 5 billion. AIR
Worldwide is a Verisk (Nasdaq:VRSK) business.
Low pressure system “Bernd” parked itself over central Europe
and brought about significant flooding from July 13 to 18.
Germany’s Rhineland-Palatinate and North Rhine-Westphalia regions
were particularly affected, experiencing heavy and, in some cases,
historic rainfall amounts, with the border region between the
German states of Bavaria, Thuringia, and Saxony being affected by
localized flooding as well.
Impacted German rivers with notable gauge readings include the
tributaries of the Mosel and Rhine rivers, some of which reached
historically high levels. One area that was especially hard hit is
the Ahr valley, which is named after the Ahr River, a left
tributary of the Rhine River in Germany. All along the Ahr River,
homes were flooded and bridges were broken; in the village of
Schuld most buildings were destroyed.
Also heavily affected were the mountainous areas in the border
region between the southeasternmost region of Germany and the
Austrian states of Salzburg and Tirol. Affected communities include
Hallein, Kufstein, and various communities in the region of
Berchtesgaden. Communities in the German state of Saxony were also
affected—especially in the mountain range Saxon Switzerland.
The restoration of infrastructure such as water and gas pipes,
power lines, and roads could take weeks or even months, according
to some estimates, which could lead to loss inflation effects. To
produce the loss estimates, AIR analyzed hourly precipitation
fields over Germany derived from NASA’s Global Precipitation
Measurement (GPM) system during July 5 to 19. Daily observed
rainfall data from over 1,600 gauging stations, obtained from the
Climate Data Center at Deutsche Wetterdienst (DWD), was also
assimilated to improve the quality of the GPM precipitation input.
As the vast majority of losses for this event within Germany came
from the catchments of the Rhine and Danube basins, the loss
estimate is limited to these two river basins within Germany.
River flow data from more than 900 gauging stations in the Rhine
and Danube river basins within Germany, obtained from country’s
provincial and federal agencies, was used to calibrate and validate
the modeled flows.
Included in AIR’s estimates are losses to insured physical
damage to property (residential, commercial, industrial, auto,
agriculture), both structures and their contents, from both on- and
off-floodplain flooding. Other countries and regions that
experienced flooding include Belgium, Switzerland, Austria,
Luxembourg, and the Netherlands’ southernmost province Limburg, but
these regions are not included in AIR’s loss estimate.
AIR notes that many reinsurance contracts are subject to an
hours clause (typically 504 hours for flood events). Given the
duration of this event, AIR expects the flood to be treated as a
single occurrence in Germany.
About AIR Worldwide AIR Worldwide (AIR)
provides risk modeling solutions that make individuals, businesses,
and society more resilient to extreme events. In 1987, AIR
Worldwide founded the catastrophe modeling industry and today
models the risk from natural catastrophes, terrorism, pandemics,
casualty catastrophes, and cyber incidents. Insurance, reinsurance,
financial, corporate, and government clients rely on AIR’s advanced
science, software, and consulting services for catastrophe risk
management, insurance-linked securities, longevity modeling,
site-specific engineering analyses, and agricultural risk
management. AIR Worldwide, a Verisk (Nasdaq:VRSK) business, is
headquartered in Boston, with additional offices in North America,
Europe, and Asia. For more information, please visit
www.air-worldwide.com.
Kevin Long
AIR Worldwide
+1-617-267-6645
klong@air-worldwide.com
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