Flooding in central Europe could cause billions in losses, analysts say

THE latest flooding in central Europe could cause economic losses ranging from several hundred million euros to billions, early estimates published on Monday (Sep 16) found, as the region braced for more damage.

Credit rating agency Morningstar DBRS estimates losses will range from several hundred million euros to more than one billion euros (S$1.4 billion), Mario De Cicco, vice-president of global insurance and pension ratings at Morningstar DBRS, told Reuters in emailed comments.

Insured losses are expected to be higher in the Czech Republic, where insurance is more prevalent, than in Poland, De Cicco said.

Gallagher Re, a reinsurance broker, said that it was too early to provide a concrete estimate given the rain was still falling and river levels rising but that economic losses would likely be in the billions.

“We have every expectation that economic costs will be measured in the billions (USD) but it’s simply going to take time to fully assess until more clarity emerges,” said Steve Bowen, Gallagher Re’s chief science officer.

The two countries are some of the hardest hit by flooding, the worst in the region for at least two decades. Austria and Romania have also suffered, and at least 15 people have died.

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Besides local insurance firms, big Austrian insurers – especially those active in the Czech Republic and Poland – are expected to be those most affected, De Cicco said.

Severe weather events have caused some of the biggest losses for insurers in recent years, prompting appeals from the industry to do more to address climate change. REUTERS