Munich Re, one of the world’s largest reinsurance companies, will reveal the exact amount the flooding has cost the business early next month, the figure is expected to come to several hundred million euros, the Süddeutsche Zeitung daily newspaper uncovered.
Rival company Swiss Re revealed on Monday that it was paying out €233 million in flood damages.
Peter Höppe, head of geographical risk assessment at Munich Re, said that though the total cost of the flood damage was not yet clear, it was likely to be the most expensive natural disaster in German history.
“When it comes to flood damage, a lot can be done by way of prevention,” Höppe told the paper and cautioned against building in areas prone to flooding. “Houses destroyed by floods in principle shouldn’t be reconstructed,” he said, but acknowledged that this was “of course, not very realistic.”
The last major floods in Germany just over a decade ago caused €11.6 billion worth of damage, of which €1.8 billion was paid by insurance companies, according to Munich Re. It estimates this year’s flooding in Germany and other parts of Europe is likely to cost insurers between €2.7 and 3.5 billion.
However, according to the Süddeutsche Zeitung, the industry is well able to cope with the cost of natural disasters, since insurers are protected by coverage limitations as well as by their own reinsurance.