Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • News

German insurers’ combined ratios could rise 5% due to floods

Open-access content Wednesday 21st July 2021
German insurers’ combined ratios could rise 5% due to floods

Last week's severe floods in Germany could add up to 5% to the country's non-life insurers’ net combined ratios, according to Fitch Ratings.

In a recent commentary, the credit rating agency said that insured losses from the floods are likely to be Germany’s highest from a natural catastrophe event since widespread flooding in 2002, which led to claims of €4.5bn (£3.9bn), gross of reinsurance.

However, in most cases, losses are not expected to burn through insurers’ earnings and materially affect capital due to extensive reinsurance cover for natural catastrophes and strong profitability from other business lines.

“We expect the vast majority of the flood claims to be covered by reinsurance, limiting the impact on insurers’ combined ratios,” Fitch Ratings said.

“Moreover, the German non-life sector has good underlying profitability, mitigating the impact of natural catastrophe losses, which are inherently volatile.”

Severe flooding hit much of Western Europe last week, with Germany bearing the brunt of the extreme weather with at least 159 people killed, mainly in Rhineland-Palatinate and North Rhine-Westphalia.

The flood claims will be driven by property damage under buildings insurance, followed by vehicle write-offs under motor insurance, according to Fitch Ratings. 

It said that natural catastrophe claims in Germany are typically about €3bn in a normal year, but are already set to significantly exceed this amount in 2021 due to the recent floods, which came after about €1.7bn of claims caused by heavy rains and hailstorms in June. 

Factoring in typical levels of hailstorm claims this summer and storm-related claims this autumn and winter, 2021 is expected to be one of the worst years so far this century for German natural catastrophe claims.

Despite this, the combined ration of Germany's non-life insurance sector is still forecast to be below 100% this year, indicating an underwriting profit.

“The sector’s combined ratio for 2021 is likely to be above the 94% we forecast at the start of the year,” Fitch Ratings said. “However, we still expect it to be below 100% given below-average claims from non-catastrophe insurance so far this year, which typically drives insurers’ overall profitability.”

 

Image credit: Shutterstock

Author: Chris Seekings
 

Filed in:
News
Topics:
Environment
Reinsurance
Global

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, 71-75 Shelton Street, London WC2H 9JQ. Tel: 020 7880 6200