A number of European insurers and reinsurers have indicated that despite the widespread damages caused by the ongoing floods in Germany and Eastern Europe, their exposure to claims is limited.
With analysts now increasing their overall damage estimates daily – the latest figures indicate total losses may be as high as €20 billion ($19.7 billion) – most of Europe’s insurers have remained remarkably calm about the extent of the claims they may have to handle.
Australia’s QBE, the second largest participant in the Lloyd’s market, indicated that, despite extensive operations in Germany, Bulgaria and the Balkans, it did not expect any adverse impact from the disaster. CEO Frank Halloran issued a statement (reported by Reuters) that ” to date, we are not aware of any insurance losses that have a material impact on our projected insurance profit of 6 percent-65.5 percent of net earned premium for 2002.”
A spokesman for Munich Re, interviewed by the BBC, explained that German insurers do not automatically include flood insurance in homeowners’ or most commercial policies. Although it’s widely available as additional coverage, costing as little as $50 a year, most people don’t buy it, because they think the risk of flood damage is highly unlikely. He estimated that only about 10 percent of the country’s insurance policies have it. While this minimizes the losses to the insurers, it leaves thousands of homeowners in need of government assistance to rebuild their homes.
AXA Colonia, the German subsidiary of France’s AXA Group, similarly indicated that most households in the flooded areas didn’t have coverage, and that most of the claims the company expected to receive would arise from lost and damaged automobiles.
France’s SCOR, which has substantially reduced its exposure to natural catastrophe risks, indicated that it would have only minimal losses from floods.
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