When the water recedes, the work begins

From Christoph von Eichhorn and Sebastian Strauss
This article was published by the Süddeutsche Zeitung on June 12
Andreas Stoye kneels in front of a cellar staircase and gazes into the darkness. Until recently, the water still reached the top of the steps, recognizable by a thin layer of mud. Stoye takes a photo of the edge of the water with his mobile phone, then descends into the cellar in yellow safety shoes. Let's see what surprises are waiting there.
Photo credit: Christoph von Eichhorn
The house in Wertingen near Augsburg is Stoye's first assignment a few days after the flood disaster in southern Germany. As a ‘major loss adjuster’ for the insurance company Allianz, the expert is currently inspecting every day what the flood disaster has destroyed and what values it has destroyed. In this case, the homeowner Manuel Leichtle, who accompanies Stoye downstairs. First things first: ‘Where was the fuse box?’ asks Stoye cautiously. ‘Ground floor,’ Leichtle replies. Phew, a relieved nod. So the electricity is still working and the building services don't need to be completely checked. Above all, the family of four can stay in the house. However, without heating for the time being, as the water has destroyed the pellet stove in the basement along with four tons of wood pellets. ‘Everything swelled up,’ says Stoye and lets the result, a muddy light brown slurry, trickle through his hands. Another stroke of luck: if the pellet tank had been completely full instead of only half full, it might have blown up the walls, soaked with water. So Manuel Leichtle is lucky, the stuff can simply be shoveled out.
Andreas Stoyes, "major loss adjuster" for Allianz
Photo credit: Christoph von Eichhorn

After the dramatic floods in Baden-Württemberg and Bavaria, the situation is slowly normalizing, despite new rainfall in some places. But now the work is just beginning. ‘We expect insured losses in the region of two billion euros,’ said Jörg Asmussen, Managing Director of the German Insurance Association (GDV) last week. Most of the damage was to buildings, which now have to be surveyed and settled. A lot of work for the insurers.

Manuel Leichtle, for example, also had buildings insurance against damage caused by natural forces, and Allianz is covering the costs, drying the walls, replacing the heating and the lost household contents. The contents are currently scattered around the garden or have already been disposed of in a dumpster, including several expensive motorbike outfits, the children's toys and mementos from his deceased parents. Stoye transfers 54,000 euros directly to Leichtle's account after a quick calculation on his laptop. The sum may increase over time if further damage occurs.

The flood disaster is a mammoth task for the insurance industry. ‘We have already received 6,000 claims in the first few days,’ says Christian Krams, Chief Claims Officer at Versicherungskammer Bayern, in his office in Munich. A figure that far exceeds the usual expectations for such events. A task force of around 20 specialists is now meeting every morning at the Versicherungskammer to coordinate the tense situation. 700 employees are working on the claims from the past few days, supported by colleagues from other departments.

‘With this number of damage reports, we may have to prioritize,’ explains Krams. Claims involving dangerous goods or hazardous substances could be prioritized over minor basement flooding, for example. According to Allianz, it has sent more than 600 experts to the flood area, and 6,700 drying devices are on their way to the region. If you walk through the particularly affected town of Wertingen today, it doesn't look too bad at first glance: The water has drained away, the cars are driving again, the supermarkets are open. But there's hardly anyone who isn't wearing wellies, carrying wet furniture outside, cleaning and sorting things out. Diesel generators are roaring in the driveways, car tyres, tools and broken washing machines are piled up.

Buildling expert Stefan Schmitt
Photo credit: Christoph von Eichhorn

Many people here are puzzled as to how the three streams that usually flow leisurely through the village have become raging torrents in such a short space of time. Practically everyone agrees: it's never happened before. Drone and mobile phone videos show how much of the small town was under water at the beginning of June - streets, supermarkets and several residential buildings were flooded and many residents were brought to safety by boat.

Andreas Stoye now visits one of them. Hans Volpert, 69, wearing a work uniform, explains his motto as he greets him: ‘I may have water in my house, but I have sunshine in my heart.’ Even when the flood came in the middle of the night, he didn't lose heart and tried to save what he could in his waders. Until the boat came to pick him up. ‘The worst moment for me,’ says Volpert. Three of his buildings were damaged: The water was knee-high in his house, built in 1864. He had rented out the front building, built in the 1950s, to commercial customers. It is now empty, with the wooden floor bulging on all sides. His garage is also damaged.

Photo credit: Christoph von Eichhorn
But what worries Stoye most is the smell of oil that has spread into the house. A heating oil tank in the neighboring building has burst, confirms Volpert. For building expert Stefan Schmitt, who is also assessing the damage, it is clear that at least the ground floor will have to be cleaned up and a chemist will have to determine how deep the oil has penetrated. All of this could take time. Nevertheless, Hans Volpert remains optimistic. He can stay on the first floor, couldn't the water have gotten there? But the building expert Schmitt finally makes it unmistakably clear: ‘You won't be able to live there for a long time.’ How long? ‘At least a year.’ Hans Volpert groans and stares into space. But in the end he says: ‘I still have sunshine in my heart.’ He promises to look for another flat temporarily. Volpert is paid around 50,000 euros in advance immediately.
Photo credit: Christoph von Eichhorn

‘You're a financier, but you're also a psychologist of some kind without any psychological training,’ Andreas Stoye had said in the morning - a sentence that becomes clear at this point at the latest. He has already experienced several floods, in Simbach in 2016 and in the Ahr Valley in 2021. Nevertheless, the disaster now has a special dimension, says the Allianz man. ‘The extent of the spread, from Lake Constance to Passau, has a quality of its own,’ says the 45-year-old. It shows ‘how much of the credit Mother Nature has given us we have already gambled away’.

The fact that extreme weather events such as storms, hail, heavy rain and flooding are becoming more frequent in Germany can almost certainly be attributed to the progression of climate change. A few days ago, French climate researchers explained in a brief analysis that global warming had probably intensified the storms in southern Germany. Up to ten per cent more precipitation had fallen as a result of the higher temperatures. And the Federal Environment Agency's climate impact and risk analysis published in 2021 predicts that extreme weather events will increase in the coming years, particularly in eastern and south-west Germany. According to the authors, if climate change continues, weather events could spread to the whole of Germany by the end of the century.

Photo credit: Christoph von Eichhorn
The insurance industry is affected by the consequences of climate change more than almost any other. In recent years, extreme weather events have repeatedly caused considerable damage to buildings and infrastructure. According to the GDV, in 2023 alone, natural hazards such as storms, hail and flooding caused by heavy rainfall resulted in claims expenditure of 4.9 billion euros - an increase of around 22 per cent compared to the previous year. Most of the damage was caused to residential buildings, household contents, industry and agriculture. But how will insurers respond to the increasing risk in future? Lucie Bakker, Head of Claims at Allianz Versicherungs-AG, shows a message on her smartphone. ‘Warning RED: heavy rain, 50-80 liters per square meter’ is written there, received shortly before the heavy rainfall began in southern Germany. ‘The model, which is based on artificial intelligence, can predict severe weather and customers are sent a text message,’ says Bakker. Policyholders are then informed what to do. In the event of a storm, for example, the shutters should remain open, except in the case of heavy hail, when there is a risk that window glass could be smashed. Experience with the early warning system has been good, says Bakker.
Lucie Bakker, Head of Claims at Allianz Versicherungs-AG, shows a message on her smartphone. ‘Warning RED: heavy rain, 50-80 liters per square meter’ is written there, received shortly before the heavy rainfall began in southern Germany. "The model, which is based on artificial intelligence, can predict severe weather and customers are sent a text message," says Bakker.
Photo credit: Christoph von Eichhorn

In view of increasing climate risks, however, this will hardly be enough, which is why the insurers' concept is based on a total of three pillars: In addition to prevention and individual protection measures, this includes private insurance cover and state support for extreme natural disasters. Christian Krams from Versicherungskammer Bayern believes that the first step is to offer people suitable insurance cover. ‘It is incomprehensible to me that someone who owns a house is not insured accordingly.’ Currently, 54 per cent of buildings in Germany are insured against high water and flooding. In Bavaria, the figure is only 47 per cent. Wouldn't the introduction of compulsory insurance against damage caused by natural hazards be an effective solution? No, Krams does not believe that this proposal would be effective; instead, further preventative measures should be taken. Flood polders, flood meadows, but also the securing of heating oil tanks and stable basement windows are necessary to prevent future damage.

‘I don't want to know how much more damage we'll be hit with,’ says Andreas Stoye at the end of a long working day - and shows a message from the town of Wertingen on his smartphone, warning of health risks from contaminated water. Stoye finds this worrying. But that's it for today. He has visited four customers, walked through cellars, felt walls, photographed countless cases of flood damage and transferred around 150,000 euros - and has been thanked every time.

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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