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Fitch: German flood claims to hit €1bn

Fitch: German flood claims to hit €1bn

Fitch: German flood claims to hit €1bn Insurance claims related to the floods that hit southern Germany may reach €1bn, with public sector insurers among those bearing the brunt of the disasters, Fitch Ratings said in a new report.
 
The credit rating agency said most claims are likely to be on homeowners', contents and motor insurance policies along with business interruption insurance.
 
Fitch said insurers with high market shares in the homeowners' and motor sectors are likely to see the biggest impact. These include public sector insurers, particularly Versicherungskammer Bayern and SV SparkassenVersicherung, which are active in the hardest-hit regions.
 
According to a Bloomberg report, SparkassenVersicherung has said it will face claims in the “double digit” millions, while Versicherungskammer Bayern is expecting around €60m in claims from storm fronts “Elvira” and “Friederike” that pounded Germany over the past days.
 
Meanwhile, Dusseldorf-based public-sector insurer Provinzial Rheinland sees €20 million in claims from both storms, the report added.
 
Fitch noted that economic losses incurred from the disasters may be significantly higher than the cost of insurance claims since only a third of home insurance policies in Germany include natural hazard cover.
 
The agency also said the insurance claims would weaken underwriting profitability for the sector, but they may not threaten credit profiles.
 
The insured losses would be equal to the entire expected natural catastrophe losses included in its 2016 forecasts, Fitch added, although the impact will be cushioned by excess-of-loss reinsurance cover.
 
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