A series of unfortunate events

It’s been a series of unfortunate events for Europe over the past couple of years. And this year isn’t promising to be any better.

If fears of the delta variant of coronavirus triggering another wave of infections weren’t enough, parts of Europe are now grappling with loss of lives and livelihoods due to heavy rains and floods. In the past few days, heavy rains over Central Europe have submerged entire streets, especially in Germany and Belgium. Nearly 200 people have died so far and more than 1,000 are still missing.

Unfortunate as it is, being inundated with news of weather extremities has become the norm in recent times. There is no relief in sight either, with climate change threatening to make extreme weather events more frequent and more severe. From the June hailstorms in Europe to the heatwaves in the U.S. and Canada, nature is sending clear messages about what we can expect from the future if we don’t move fast enough on fighting climate change. 

High waters

The latest tragedy, the floods in Germany and Belgium, is a stark reminder of how severe weather events have become over the past years. The toll of the recent floods is nearing 200. This is a tenfold increase from the reported casualties in the floods in 2002, which before July were deemed to be the worst floods in Europe in this century.

“The images reaching us from the disaster areas not only in the past few days, but in the last few weeks from different countries, have left us stunned,” says Klaus-Peter Roehler, Member of the Board of Management of Allianz SE and Chairman of the Board of Management of Allianz Deutschland AG. “We are there for our customers, offering the best possible support and helping wherever we can. To support relief workers, Allianz in Germany is donating 1 million euros to the rescue organizations involved,” he adds.

The donations will be used for technical equipment or gear, such as waterproof protective clothing, and for pumps and boats that were lost or damaged in the rescue operation.

For the victims, every single contribution counts.

"In the meantime, we have already received around 10,000 claims reports for damaged houses and household effects and around 3,000 claims reports for damaged vehicles," says Jochen Haug, Chief Claims Officer and Member of the Board of Management of Allianz Versicherungs-AG. "However, we expect these numbers to increase significantly in the next few days - our current forecast is for a total of more than 30,000 property damages and more than 5,000 vehicle damages with a claims volume of more than 500 million euros," says Haug.

In Belgium, 20 people have died so far. Allianz Benelux is yet to put a number to the damages. However, initial estimates by the Belgian Association of Insurers peg market-wide losses at several hundred million euros. So far, the highest recorded loss from floods in Belgium is around 150 million euros, in 2016.

Corporate insurer Allianz Global Corporate & Specialty (AGCS) is receiving the first claims from companies in the regions affected. The company’s claims experts are advising clients on the steps to resume operations quickly and safely. However, the extent of property damage is still unclear, as is the expected duration of business interruptions. 

Season of extremes

The floods are the latest in a series of weather extremes this summer in Europe.

In mid-June, extreme precipitation and hailstorm with hailstones of 5 centimeter or more in diameter were reported from France, Germany, Switzerland, the Czech Republic and Austria. “The cause of this was the low-pressure system Volker, which moved into Western and Central Europe,” says Bastian Manz, the Senior Atmospheric and Climate Risk Analyst at Allianz Re, the reinsurance arm of the Allianz Group. “The trigger was cold air associated with the low-pressure area colliding with warm, humid air over the continent. A shifting air mass boundary developed and as a result, widespread damage to building facades and roofs, windows, vehicles, photovoltaic systems and agricultural crops was reported across the continent.” At the end of June, low-pressure weather system Xero caused further hail damage and flash floods, which mainly affected central Switzerland (Lucerne and Zurich) and south-western Germany (Hessen, Baden-Wuerttemberg and Bavaria). 

These events led to an unfortunate record at Allianz Suisse, the Swiss entity of Allianz: per current estimates, Allianz Suisse expects well over 28,000 claims to be filed in relation to the various weather events since mid-June. Over 21,000 claims have already been filed, most of them related to motor insurance. The total loss estimated is over 103 million Swiss francs. For comparison: in the previous record years of 2009 and 2012, Allianz Suisse had annual claims of around 90 million Swiss francs from natural catastrophes.

For Austria, the current claims estimate is around 55 million euros, excluding the losses related to the recent heavy rainfall.

The same weather system caused a tornado in the Hodonin district of the Czech Republic towards the end of June, with wind speeds reaching up to 320 kilometers an hour. “It damaged or destroyed more than 1,200 buildings and several fatalities were reported,” says Bastian of Allianz Re. The tornado was the most destructive in the country's modern history, adds the climate expert. Allianz has nearly 20,000 customers in the affected area. Of these, more than 90 percent were contacted via text messages and phone calls on how they could reach out to Allianz for support. 

Headwinds of change

Potentially adding fuel to the fire of extreme weather events is climate change. “Global warming increases the temperature of the air, which then absorbs more water vapor. This means that heavy precipitation is expected to become more frequent,” explains Bastian.

In addition, jet streams – which are currents of air blowing from the west to east high above the Earth – have slowed. “This can lead to weather patterns of greater duration – prolonged precipitation or extensive heatwaves or extreme cold spells. Specifically, climate change causes some low-pressure systems, such as the flood-causing Storm Bernd or Hurricanes Dorian and Harvey, to slow down and accumulate over a region. This increases the duration and amount of precipitation.”   

He expects the frequency of extreme weather events such as hailstorms, tornadoes and flash floods to increase going forward. “A warmer atmosphere holds a higher moisture content – 7 percent per degree Celsius - increasing the potential for more precipitation.”  

Action required

Although efforts to limit global warming are under way, there are no immediate solutions to such extreme events. What can help, is the preparation to deal with them better and minimize the loss of life and property. “Political support is needed, especially with regard to the risks of heavy rain and flooding,” says Klaus-Peter Roehler. “Here, stringent restrictions on building in floodplains play a central role as do flood protection and river basin management.”

On an individual level, steps can be taken to mitigate risks from hailstorms. “For example, improved building regulations are already in place in Switzerland. These include hail-resistant windows, façades and structures,” says Klaus-Peter, who was responsible for Allianz Suisse in one of his prior positions.

On the part played by insurers, he says: “Our operative units advise our customers and can, if necessary, link a contract offer to a deductible or to the policyholder taking preventive measures.” But this is not enough, believes Klaus-Peter. “Especially in view of the current events in Germany, we are thinking about how we can ensure that as many people as possible are covered in the event of a loss. To this end, we must work together with the authorities to strongly promote insurance against natural hazards for property owners. After all, damage caused by heavy rain can happen anywhere.  Joint efforts are needed by the state, the economy, but also by individuals. A viable solution will have to include elements such as individual prevention, intensive flood protection, a rethinking of building and land use planning, warning and rescue systems, insurance solutions for the broad population and their affordability, and, if necessary, deductibles to ensure prevention by individuals.”

However, dealing with climate change is a societal responsibility that requires universal participation. “It is important for all of us to implement climate goals according to the Paris Climate Agreement. Over the long term, it is also necessary to adapt the infrastructure to incorporate climate protection.”

The Allianz Group is one of the world's leading insurers and asset managers with more than 126 million* private and corporate customers in more than 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 706 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage nearly 1.7 trillion euros** of third-party assets. Thanks to the systematic integration of environmental, social and governance criteria in our operations, business processes and investment decisions, we continue to be recognized as among the sustainable insurers in the Dow Jones Sustainability Index (September 23, 2022). In 2021, over 155,000 employees achieved total revenues of 148.5 billion euros and an operating profit of 13.4 billion euros for the group.

These assessments are, as always, subject to the disclaimer provided below.

*Including non-consolidated entities with Allianz customers.
** As of September 30, 2022

Press contacts

Susanne Seemann
Allianz SE
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:

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