A.M. Best predicts that German insurance carriers are “well-positioned” to absorb weather-related losses following the recent catastrophic flash floods.
The commentary by the global credit rating agency and data analytics provider cites that this would be possible owing to German insurers’ disciplined pricing, notwithstanding a potentially record-breaking number of natural catastrophe insurance claims.
A.M. Best identifies that the flooding, referred to as “Bernd”, follows several years of rather benign claims experience.
Insurance loss estimates are currently preliminary and are subject to change depending on how much longer the severe weather conditions endure.
The A.M. Best commentary expects that the adverse weather event will initiate debate over the creation of a state-backed natural catastrophe programme, potentially through a captive structure, or making elemental insurance cover compulsory in Germany.
Germany currently lacks such a programme; furthermore, flood risk is excluded from standard industrial, commercial and homeowner policies, but can be included as an extension alongside earthquake, landslide and avalanche coverage.
