How much will 2024 floods cost Central Europe?

How much will 2024 floods cost Central Europe? | Insurance Business Australia

Reinsurance

How much will 2024 floods cost Central Europe?

Preventive measures have softened the financial impact, according to Guy Carpenter

Reinsurance

By
Kenneth Araullo

The estimated market losses from the September 2024 floods in Central and Eastern Europe are expected to range between €1.6 billion and €2.1 billion, according to initial assessments by Guy Carpenter. Although the floods caused significant damage, the losses are notably lower than previous catastrophic events, such as the floods of 1997 and 2002.

This reduction in financial impact is attributed to advancements in flood risk management, including the implementation of improved infrastructure, enhanced early warning systems, and greater public awareness.

The flood event, which began on September 11, 2024, affected large parts of Austria, the Czech Republic, Hungary, Romania, and Slovakia. Torrential rain and high winds from Storm Boris led to widespread flooding, forcing thousands to evacuate their homes.

Eight people drowned in Austria, Poland, and Romania, while four others are missing in the Czech Republic. Guy Carpenter noted that preemptive actions, such as reservoir management and reinforced levees, played a key role in mitigating damage.

Global warming is expected to increase the frequency and intensity of extreme rainfall events, raising concerns about future flash floods, according to Guy Carpenter’s analysis. Factors such as land use changes, urbanization, and exposure growth will likely influence future flood losses.

However, ongoing improvements in flood defenses and building practices are expected to provide some level of protection against rising risks.

Guy Carpenter emphasized that hydrometeorological conditions leading to these floods were marked by large-scale circulation patterns that caused prolonged rainfall across the region.

These conditions, combined with local terrain and other antecedent factors, played a critical role in the scale of the flooding. Despite the intensity, early preventive measures helped protect major urban centers.

Comparing the 2024 event to the devastating floods of 1997, Guy Carpenter’s analysis shows that modern infrastructure and early preparedness significantly reduced the impact. In the Czech Republic, for example, reservoirs along the Vltava River were strategically drained to increase their capacity to handle floodwaters, while in Poland, the newly launched Racibórz Dolny reservoir helped protect cities such as Wrocław and Opole.

Guy Carpenter’s preliminary country-level loss estimates are as follows: Austria is expected to see losses between €550 million and €650 million, the Czech Republic between €600 million and €750 million, and Poland between €350 million and €550 million. Slovakia, Hungary, and Romania are expected to face combined losses of between €100 million and €150 million.

While the nominal value of these losses may surpass the figures from 1997 due to inflation, the overall impact remains lower in real terms. Approximately 20% fewer properties were affected compared to 1997, and the financial damage is expected to be less than that of the 2010 floods.

However, Guy Carpenter noted that these are preliminary estimates, and the actual losses could differ as more data becomes available. The firm will continue to monitor the situation and provide updates if needed.

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