Press release 22 February 2012
2011 was the stormiest year in Germany in the last 40 years, and major losses were caused by Achim, Bert and Frank. A recurring trend over the past few years is becoming evident, namely the increase of regional storms and the shifting of weather phenomena across individual seasons. This trend is also having an impact on the insurance industry.
2011 witnessed the heaviest losses incurred by storms in Germany compared to the past 40 years. Of the 34 individual storms, many were confined to local areas and did not cause major losses. The largest regional losses were caused by the following storms: Achim on 24 August in the Magdeburg/Halle region, Bert on 26 August in the Trier/Koblenz region and Frank on 11 September in the Brandenburg/Halle region.
There was also a recurring trend in 2011: the increase in local storms, their shift across the seasons and, consequently, the uncertainty as to when they might strike. “There used to be a north-south divide: storms occurred predominantly in the north of the country, whilst hail generally hit the south and south-west from May until August. Last year, however, there were even heavy hailstorms at the end of September. Bavaria was still experiencing heavy thunderstorms well into December 2011, something which used to be a wholly summertime phenomenon. It is no longer possible to narrow down the regions and periods”, explained Christian Diedrich, Chairman of the Board of Management at property-casualty insurer ERGO Versicherung AG.
Number of natural catastrophes in Germany triples
In Germany the number of claims arising from weather-related natural catastrophes has tripled since 1970. However, the degree of losses caused to the economy as well as insured damage has risen even further. “A fundamental reason for the increase in the amount of losses is that nowadays there are many more buildings in the affected areas, and cellars are put to different uses than they were in the past. Earlier, cellars were normally used to store fuel and provisions, whereas nowadays modern heating systems with sensitive electronic devices are generally stored there, or cellars may be used as living room. As a result, heavy rain and flooding now have a totally different impact”, Diedrich said. However, this alone cannot explain the dramatic rise. “This is where climate change comes into play”, explained Professor Peter Höppe, Head of Geo Risks Research / Corporate Climate Centre Munich Re. “As shown by recent scientific studies, we have to expect heavy rain, heat waves and more aggressive winter storms in Germany in the future.” Total damage caused by natural catastrophes amounted to 82 billion euros over the past 40 years, of which 32 billion euros were insured.
Cover against natural hazards
To protect against extreme weather conditions such as heavy rain, high tides and flooding, homeowners and tenants need so-called insurance against damage by natural forces. However, in Germany on average only 29 % of households have this type of supplementary insurance for their property, and only 17 % of households insure their personal effects against natural hazards. Unless the policy states “other natural hazards included”, home contents insurance only covers losses from fire, burglary and damage from mains water and gales. “Nowadays, however, heavy rain causes around 50 % of all flood damage, which also affects buildings not located near rivers or bodies of water. 98.6 % of all residential properties in Germany can be easily insured against such risks, and the remaining 1.4 % must be considered on a case-by-case basis”, Diedrich continued.
The increase in regional storms and the losses incurred as a result have led to a rise in demand for cover against damage by natural forces over the past ten years. Consequently, the density of residential property insurance with supplementary cover against natural forces rose in Germany from 3 % in 2001 to 20 % in 2011 (figures do not include large built-up areas such as e.g. Baden-Württemberg).
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About the ERGO Insurance Group
With premium income of € 20 billion, ERGO is one of the major insurance groups in Germany and Europe. Worldwide, ERGO is represented in more than 30 countries and concentrates on Europe and Asia. ERGO is one of the market leaders in all segments in its home market of Germany. More than 50,000 people work for the Group, either as salaried employees or full-time self-employed insurance agents.
ERGO offers a broad range in insurance, provision and services. More than 40 million customers, of which 20 million are based in Germany alone, place their trust in the expertise, security and support provided by ERGO and its experts in the various fields of business.
ERGO is part of Munich Re, one of the world’s leading reinsurers and risk carriers.
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Disclaimer
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of ERGO Insurance Group. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forwardlooking statements or to conform them to future events or developments.