July 2021 European Floods

Final Posting | Summary
Posting Date: July 28, 2021, 5:00:00 AM

AIR estimates insured losses in Germany from July flooding to approach EUR 5 billion.

Assumptions and uncertainties associated with AIR’s loss estimates are discussed in the “AIR Modeled Losses” section. Event sets, loss based similar stochastic events, a flood footprint shapefile for import into Touchstone^® or other GIS applications, and an updated UNICEDE/2 take up rate import file for Germany are all available for download to ALERT™ subscribers from the Downloads tab. The information provided herein is strictly confidential and is solely for the use of AIR clients; disclosure to others is prohibited.

AIR Modeled Losses

To produce the loss estimates, the AIR flood team analyzed hourly precipitation fields over Germany derived from NASA’s Global Precipitation Measurement (GPM) system during July 5 to 19. Daily observed rainfall data from over 1,600 gauging stations, obtained from the Climate Data Center at Deutscher Wetterdienst (DWD), was also assimilated to improve the quality of the GPM precipitation input. As the vast majority of losses for this event within Germany came from the catchments of the Rhine and Danube basins, the spatial extent of this event set, posted through AIR’s ALERT service, is limited to these two river basins within Germany. Perturbations based on the spatial correlation in precipitation accumulations were introduced to the adjusted precipitation fields to generate a large set of precipitation scenarios and, thus, to quantify the uncertainty associated with the precipitation input. This ensemble of precipitation fields (a total of 50 scenarios) was then used to model runoff and river flow.

River flow data from more than 900 gauging stations in the Rhine and Danube river basins within Germany, obtained from country’s provincial and federal agencies, was used to calibrate and validate the modeled flows. Each precipitation scenario generated a loss scenario resulting in an ensemble of loss estimates. Based on the estimated loss pattern across Germany, five scenarios from the ensemble catalog were selected to represent the range of estimated losses. These five scenarios have been posted to the ALERT website.

Note that many reinsurance contracts are subject to an hours clause (typically 504 hours for flood events). Given the duration of this event, AIR expects the flood to be treated as a single occurrence in Germany.

AIR’s loss estimates include:

• AIR’s assumed take-up rates in Germany; a UNICEDE/2 format file of the take-up rates used to develop the insured industry loss estimates is available as a download in the “Additional Downloads” section below
• Insured physical damage to property (residential, commercial, industrial, auto, agriculture), both structures and their contents, from both on- and off-floodplain flooding
• Additional living expenses (ALE) for residential claims and business interruption (BI) for commercial claims

AIR’s loss estimates do not include:

• Losses in Switzerland, Belgium, Luxembourg, Austria, or other areas outside Germany
• Losses to uninsured properties
• Losses to infrastructure
• Losses from extra-contractual obligations
• Losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event
• Demand surge
• Other non-modeled losses

Event Recap

Low pressure system “Bernd” parked itself over central Europe and brought about significant flooding from July 13 to 18. Germany’s Rhineland-Palatinate and North Rhine-Westphalia regions were particularly affected, experiencing heavy and, in some cases, historic rainfall amounts, with the border region between the German states of Bavaria, Thuringia, and Saxony being affected by localized flooding as well. Impacted German rivers with notable gauge readings include the tributaries of Mosel and Rhine, some of which reached historically high levels. One area that was especially hard hit is the Ahr valley, which is named after the Ahr River, a left tributary of the Rhine River in Germany. All along the Ahr River, homes were flooded and bridges were broken; in the village of Schuld most buildings were destroyed. Also heavily affected were the mountainous areas in the border region between the southeasternmost region of Germany and the Austrian states of Salzburg and Tirol. Affected communities include Hallein, Kufstein, and various communities in the region of Berchtesgaden. Communities in the German state of Saxony were also affected—especially in the mountain range Saxon Switzerland. 

Other countries and regions that experienced flooding were Belgium, Switzerland, Austria, Luxembourg, and the Netherlands’ southernmost province Limburg.

Reported Damage and Disruption in Germany

At least 100 people in Germany were reported to have died as a result of the flooding. Schools were closed in much of western Germany. Tens of thousands of people in the affected parts of western Germany lost power. The restoration of infrastructure such as water and gas pipes, power lines, and roads could take weeks or even months, according to some estimates, which could lead to loss inflation effects. Damage to 600 km of railroad and 80 railway stations in Germany has been reported. 

Final Posting | Downloads
Posting Date: July 28, 2021, 5:00:00 AM

The information provided herein is strictly confidential and is solely for the use of AIR clients; disclosure to others is prohibited.

Simulated Event Set

Note: The "All simulated scenarios" set consists of all the events simulated by AIR using the event's actual parameters. The "Select simulated scenarios" set consists of a subset of the full distribution that is most representative of the range of potential industry losses.

Product	Version	Description	Download
TOUCHSTONE Re	8 and 9	Selected set of simulated scenarios
TOUCHSTONE	8 and 9	Selected set of simulated scenarios

Loss Based Similar Stochastic Event IDs

Note: These lists give event IDs taken from our stochastic catalog that have similar characteristics as the current event, based on the insurable industry loss footprint of the five scenarios in the Simulated Event Set.  They are recommended for use in cases where the Simulated Event Set or Shapefile cannot be utilized.

Product	File Type	Description	Download
TOUCHSTONE / TOUCHSTONE RE	Excel (xls)	Selected set of stochastic events

Additional Downloads

Note: Additional downloads related to the posting are listed below. Please use the appropriate application to view these files.

Title	File Type	Description	Download
Modeled Flood Extent Shapefile	.zip	A shapefile of the modeled flood extents in Germany, along with instructions for importing into Touchstone.
Updated Take Up Rates for Germany	.txt	Latest industry insured take up rate assumptions for Germany in UNICEDE/2 format