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European floods put pressure on insurers

European floods put pressure on insurers

European floods put pressure on insurers Ratings agency Moody’s has announced insured losses for floods in France and Germany earlier this year will be credit-negative for European insurers and reinsurers, as the claims will hit their first half 2016 profits.

Moody’s announced AXA and Allianz are the insurers it expects to be most affected. This is based off estimates from the French and German insurance associations of total losses from the floods to be €1.2bn for Germany, and between €0.9bn and €1.4bn for France.

Last week, ratings agency AM Best also released a statement regarding losses for insurers following the storms.

AM Best stated that while the cost of the storms will dampen the first half 2016 earnings of European insurers, it does not expect it will take negative rating actions.

Alex Rafferty, financial analyst and contributor to AM Best’s briefing titled French and German Floods to Dampen Insurers’ H1 2016 Earnings; Negative Rating Actions not Anticipated, said the market is expecting some 150,000 claims, with the large personal lines insurers providing property and motor insurance most affected.

“Caisse Centrale de Réassurance (CCR) expects the recent floods to be the largest insured natural catastrophe loss incurred since 1982, with the state-backed reinsurer taking a significant share of the total market loss,” Rafferty said.

AM Best’s briefing also notes the disparity between economic and insured losses will be greater in Germany than in France due to lower levels of flood insurance uptake.

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