“It is important to collaborate with our customers on flood protection”

There have also been severe floods in the past, but the average damage caused by such natural disasters has actually increased in recent decades. There are various reasons for this: Firstly, more people now live in areas at risk and there are generally more material assets that are potentially at risk. In addition, many rivers have been straightened, for example the Rhine is now around 100 km shorter than 200 years ago, and there are fewer flood compensation areas and more sealed ground. Climate change is also contributing to an increased risk of flooding, as heavy rainfall is potentially becoming more frequent and more intense. A warmer atmosphere can absorb more moisture, which can also cause heavier rainfall. At present, for example, the Mediterranean is around 2 degrees warmer than the long-term average, which can intensify events such as the current one. In addition, the media presence of such events in recent years has made us even more aware of the effects of such events. 

Relevant developments are taken into account in risk modeling and our models and therefore also our tariffs are regularly adjusted. 

First and foremost, we are there to offer our customers insurance cover for such existential threats. In the vast majority of cases, we are able to do this thanks to risk-appropriate tariffs and excellent natural catastrophe risk management - and will continue to be able to do so. However, it is important to note that insurance cover is only one of several measures. The greatest contribution to risk management is made by taking the right precautions, especially where and how buildings are constructed. In addition, flood protection measures such as flood plains and dams are  most effective. In addition, well-equipped and organized disaster control is extremely important, as is becoming clear again these days. An insurance company like Allianz is there to cover the risk that remains after all these measures have been taken. And this risk is calculated using detailed hazard maps and models.

It is important to collaborate with our customers on flood protection to help them prepare for extreme events and teach them how to respond in the event of an incident. As part of the Group Market Management Customer Experience Initiative, we have therefore developed the Global Risk Assessment Tool (GloRiA), which is based on global risk maps and enables customers to assess their exposure to natural hazards. GloRiA is accompanied by informative checklists for private customers to improve risk provisioning and minimize losses from storms, floods, earthquakes and fires.

In view of the increasing loss potential due to climate change, it is increasingly important to ensure risk-appropriate pricing. For underwriting, pricing and risk assessment, Allianz uses a combination of multiple, highly detailed hazard maps and high resolution models (up to 5m) from public sources or developed by third parties and in-house. The assessment also takes into account details of the insured properties (e.g. insured value, building characteristics such as the availability of a basement, etc.).

So-called "secondary perils", e.g. floods, hail or forest fires, generally occur more frequently, but on average cause less severe accumulation losses than hurricanes in the USA, for example. Even if  the level of influence of climate change  is uncertain , Allianz expects an increase in events and losses, particularly for floods and forest fires. Allianz therefore invested in models for these risks at an early stage and uses over 20 flood models, for example. Five of the top 10 scenarios modeled by Allianz are such "secondary perils" (hail Australia and Germany, and flood Australia, Germany and UK).

Allianz is therefore also working with scientific partners such as the Karlsruhe Institute of Technology in order to better assess the impact of climate change on these hazards and constantly improve the risk models accordingly.