July 2021 floods (Storm Bernd)
Torrential rains on July 14 and 15, 2021, in Germany and Belgium, causing over 220 deaths and a German insured loss of about 8 billion euros, the heaviest in its history for flooding.
On July 14 and 15, 2021, the depression Bernd, stalled over Western Europe, drops up to 150 liters of water per square meter in forty-eight hours on the Eifel and Belgium. The Ahr river, in Rhineland-Palatinate, rises several meters in a few hours, destroying bridges and villages. There are more than 220 deaths in Germany and Belgium, the worst German natural disaster since 1962. The German insurers' association puts the insured loss at about eight billion euros in Germany, a record for flooding. A significant part is uninsured: in 2021, about 46% of German homes had extended natural hazard cover, which includes flooding. The loss had three effects on reinsurance. It reminded the market that river flooding is an accumulation risk that European models handled less well than windstorm. It raised prices and retentions on exposed German programs at January 1, 2022. And it fed in Germany, until 2024, the debate on a compulsory natural hazard insurance, which the federal and Länder governments did not settle. European markets took the lesson: a slow event, in a place where one does not expect it, can cost as much as a cyclone.
Textbook case. German insurer with 2M homes, 45% with flood cover. Gross loss of EUR 380M in the Ahr area, or 3.8% of the EUR 10bn market. Per event excess of loss treaty of EUR 250M excess of EUR 100M: it pays EUR 250M, the layer is exhausted. Its renewal premium rises 30%, its retention goes to EUR 150M. The share of policyholders without flood cover stays exposed, with no recourse.
Storm Bernd, July 2021 floods, Ahr valley floods, Germany Belgium floods 2021, European floods 2021
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.