Allianz, Munich Re losses from Europe floods estimated at 350 million euros

Allianz Group has released a preliminary estimate of the impact that severe flooding in central Europe will have on the company, while one analyst firm expects reinsurers to take a bigger share of losses from the events.

Allianz has said its loss will likely be above 0.5 billion euros. “The size of this natural catastrophe will trigger reinsurance covers for Allianz, limiting the net loss to approximately 350 million euros,” its statement said.

Meanwhile, Reuters has reported that Munich Re is estimated to take a similar hit, of between 250 and 350 billion euros. That estimate comes from a JP Morgan analyst who also noted that Munich Re paid claims of 400 million euros in 2002, a year that also had severe flooding.

In a briefing document June 7, analyst firm Keefe, Bruyette and Woods estimated that eight large industry players in the area (including Allianz and Munich Re) will pay out 1.75 billion euros, with the rest of the market taking a 1 billion euro hit.

“This splits 54/46 primary insurance/reinsurance, which implies that the reinsurers take a bigger share than they did in 2002,” its update says.

Flooding in the summer of 2002 in Germany and central Europe cost the insurance industry 3.4 billion euros, according to the firm.

“We all remember 2002, but this is a different disaster,” Manuel Bauer, member of the board of management of Allianz, who manages the entire central Europe region, noted in a statement from the company.

Allianz said Bauer saw how measures taken in Prague have worked to prevent the massive flooding that happened at that time. “It is remarkable to see how well the city and the country have dealt with the floods this year,” he noted.

Still, flooding in that city has been severe, and the company is working on documenting damage by boat.

The company said it will update its loss estimate from the events during the release of its second quarter results on Aug. 2.

Photo: “Several villages remain under water, but the situation is under control,” Allianz says. (Photo by Vaclav Balek, Allianz Czech Republic)