Modeler Sees German Flood Costs as High as $7.7 Billion

The worst flooding in central Europe since 2002 could cost insurers as much as 5.8 billion euros ($7.7 billion) in claims from Germany, catastrophe modeler AIR Worldwide said.

Economic losses will be “much higher,” the company said yesterday in an e-mailed statement. Insured losses in Germany will probably be at least 4 billion euros, AIR said.

Triggered by heavy rain, the floods disrupted road and river traffic this month and forced tens of thousands of German residents to flee. Allianz SE (ALV), Europe’s biggest insurer, said it may have 350 million euros in flood-related costs, while Hannover Re (HNR1) estimated that its losses would be less than 200 million euros.

“An extraordinarily wet May and several days of heavy and relentless rainfall in June have resulted in the worst flooding to hit parts of central Europe in many years,” Yorn Tatge, managing director of AIR, said in the statement. “Germany, Austria, and the Czech Republic have suffered the brunt of the flooding, the worst since the Elbe flood of 2002.”

The floods killed at least 10 people in the Czech Republic and at least six in Germany. Hungary could see record flood levels, AIR said.

The Saale River in Halle, Germany, reached its highest level in at least 400 years, AIR said. In Passau, Germany, floodwaters hit their highest level since 1501. The Danube river reached a record level earlier this month, officials in Budapest said.

Germany’s federal government will sell as much as 8 billion euros of bonds to establish a flood-recovery fund, Finance Minster Wolfgang Schaeuble said yesterday in an e-mailed statement.

To contact the reporter on this story: Kathleen Chaykowski in San Francisco at kchaykowski2@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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