European floods seen as largest industry loss of 2021
Extreme flooding event in Western Europe in mid-July has generated the largest industry loss figure in 2021, an estimated $11 billion, according to Cresta, a provider of global standards for risk aggregation zones and cat industry losses.
The floods in Europe occurred between 12 to 18 July 2021 and mainly affected Germany, Belgium, the Netherlands and Luxembourg. Austria, France, Switzerland and the UK were also affected, but to a much lesser extent.
Unlike in previous major flood events in Europe (2002, 2013), which were dominated by slow-moving flood waves running downstream along major rivers, the 2021 floods were characterised by bursts of devastating flash flooding in small- and medium-scale river catchments. The floods caused extensive property and infrastructure damage and resulted in the loss of at least 240 lives.
This was followed by the severe convective storms in Europe in June which to date have generated an industry loss of $5.1 billion, and the Fukushima earthquake in Japan in February with an industry loss of $2.5 billion.
The third quarter period also witnessed another significant industry loss in China’s Henan province when extreme rainfall in July caused flood-related industry losses of $1.9bn, representing the largest cat event loss ever for the Chinese insurance market.
Cresta noted that while the weather patterns are not directly comparable, it is striking that three of these events are linked to bursts of extreme precipitation during the summer months which caused devastating flooding and hail. "This is in line with climate-related model forecasts, which indicate an increase in severity and frequency of extreme precipitation events resulting from higher temperatures and increased water-holding capacity in the atmosphere. Coupled with the growth in insured assets, this ever-changing risk landscape creates a formidable challenge for the insurance industry," it warned.
Matthias Saenger, technical manager of CLIX, Cresta's Industry Loss Index, said: “The benign period in international Cat industry losses in 2020 and until early 2021 changed dramatically in June when severe convective storms in Europe brought extreme rainfall and hail, causing significant damage primarily across Germany and Switzerland. These storms were followed by the major flood events in July in Europe and China, which generated record losses for the insurance industry.”
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