"We’re strengthening risk awareness and prevention - together with our customers"

lucie bakker, Vorständin, Allianz Versicherungs-AG

Claims in the affected areas have only gradually been reported while water levels slowly decrease. As of Wednesday evening, water levels were still rising in some places. Not only rivers are overflowing – in some places the groundwater has risen to the extent that the sewage system can no longer process it. This means that damage is not only occurring in areas close to rivers, but also often in city centers where, in addition to basements, entire first floors are also flooded. 

Whether an insurance policy pays out in the event of a flood depends on the policy: a homeowners or contents insurance policy must also include a natural hazard cover. At Allianz, we offer every residential building policy with a natural hazard protection option – a voluntary opt-out is always possible.

Natural hazard insurance covers pumping out, draining, or, in a worst-case scenario, the cost of demolishing and rebuilding a house. However, damage caused by groundwater is generally not insurable. As a rule of thumb, if water enters a building from the outside through windows, masonry, and doors, it is probably flood damage covered by insurance.  

We can’t predict this precisely yet. Our team will only be able to assess the damage once the water has drained away and cellars and living areas are once again accessible. It will take a few more days before we can provide a reliable initial assessment of the total damage. We are currently concentrating on recording all incoming damage reports and providing assistance to customers quickly and pragmatically. 

The affected areas are spread very widely across southern Germany. In areas where the water has already drained away, more than 600 loss adjusters are already on the road to assess the damage, discuss drying and repair measures, and, if necessary, pay out advances. 

Allianz Handwerker Services is also active locally. It quickly provides our policyholders with professional tradesmen and invoices the services directly to us. We have also organized around 6,700 drying devices and made them available to customers. In situations like this, it's all about speed – this is the moment of truth for our product promise. 

It's true – in 2021 we had to live through a natural disaster in Germany that we would never have thought possible. The individual suffering, the destruction, and the grief were indescribable. We as Allianz were also faced with new challenges: the infrastructure was completely destroyed. The big question was how we could help our customers – but also our employees – as quickly and as well as possible under these circumstances. We fundamentally changed many of our processes three years ago. Claims can now be reported online without any problems – this helps us to process claims more quickly and deploy our colleagues on site more efficiently. We also set up a new task force unit to support the actual claims field service – our so-called "Flex SAD". This unit is always ready for action throughout Germany. As a result, we were able to be on site in the affected regions last weekend and provide assistance. The logistical and administrative processes have also matured further: ordering and scheduling drying equipment, establishing the ability to work, applying for overtime and weekend-work – we can now do this very quickly and were therefore prepared and immediately ready for action. 
First of all, keep calm and don't do anything hasty. It is important that you document all damage as well as possible, for example by taking photos or measuring water levels. What is important to remember: never go into your cellar or underground garage to retrieve objects or your vehicle when water is actively flowing. Water can accumulate very suddenly and pose a life-threatening risk! If in doubt, call your fire department or the THW for help – for example, if you see an oil slick on the surface of the water. We have more detailed checklists on our website. At the same time, it is better to be safe than sorry. Prevention and prudent decision-making are equally important. Because only with an additional cover for extreme weather protection, for example within a household contents or homeowners' insurance, will the costs of repair work or damaged home contents be covered. 
Firstly, it is important to be aware of the risks and to keep up to date with the threat of extreme weather conditions such as hail, thunderstorms or heavy rain. With the Allianz Home Risk Assessment, we offer the opportunity for everyone to determine their individual risks from natural hazards based on their building’s address, as well as to receive specific checklists. Our customers can also receive SMS weather warnings and tips for preventive measures via the “Allianz Unwetterservice”, an AI-based solution. Although damage cannot always be completely prevented, it can be mitigated. For example, if valuable items can be moved from basements to upper floors in time. In terms of prevention, it is also important to ensure that flood-adapted construction methods and materials are used in renovations and new buildings. Due to global warming, extreme weather conditions including as storms and heavy rainfall will become more frequent in the future. We are therefore working with our customers to increase risk awareness and prevention. 

The situation in the United States is comparable to that in Germany only to a limited extent. In the U.S., construction methods are often not adapted to the growing number of natural disasters, and coastal regions particularly at risk are heavily populated. In addition, the legal environment is more prone to lawsuits and other regulatory requirements, which has forced some insurers to withdraw or massively increase premiums. 

In Germany, natural hazard cover is possible and affordable for almost all homes with reasonable premiums. Almost 99% of all buildings are located in zones where the risk of flooding, backwater, and heavy rainfall is very low to low. 

The issue is rather that still too few homeowners opt for natural hazard insurance – only 54 percent of all households in Germany have such cover, and in Bavaria the figure is only 47 percent.

From Allianz's point of view, compulsory insurance alone is not a sensible alternative. It creates no incentive for prevention. We need an overall concept against natural hazards that effectively combines protective measures, climate impact adaptation, risk-adequate offers from insurers, and support from the state in the event of extreme disasters. This is the only way we can break the spiral of increasing losses from climate risks and extreme weather events and rising premiums.

Without much more significant preventative measures, the effects of climate change will be impossible to handle in the future – especially catastrophic damage caused by heavy rainfall. This is where politicians and local authorities need to step up their efforts and spend money on implementing suitable measures. Prevention begins with legislation for construction and water management that is adapted to the consequences of climate change, but also includes, for example, climate-adapted construction and flood protection for large rivers as well as the adaptation of sewer systems to heavy rainfall events through the construction of suitable retention systems.

The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 746 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.8 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of March 31, 2024.
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:
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Due to the heavy rainfall last weekend, several regions in southern Germany have been severely impacted by flooding. Allianz has taken various measures to quickly provide the best possible assistance. Lucie Bakker, Head of Claims at Allianz Versicherungs-AG, gave an initial assessment of the situation.