“Floods of the century” are no longer an exception in Germany. Many politicians want to hold insurance companies accountable – Germany’s largest insurer is turning the tables.
After the June floods, Allianz denounced deficiencies in German and Bavarian flood protection. CEO Oliver Bäte drew a negative comparison with the Netherlands in Munich: “The most important thing, including in Bavaria, is that we are getting better at preventing damage,” said Bäte when presenting the half-year figures of the DAX group and Germany’s largest insurer. “You may ask yourself why we continue to have such high levels of damage in Germany.” Other countries like the Netherlands, “which have been living below sea level for centuries,” are better at prevention.
292 million euros in costs due to June floods
According to the company, Allianz alone received 11,500 damage reports from customers following the June floods along the Danube and several of its tributaries; the group estimated the costs at 292 million euros.
Overall, it is estimated that the June floods caused insured damage of around two billion euros. Including uninsured damage, experience shows that the total amount is likely to be considerably higher.
Bäte’s criticism relates, among other things, to the fact that several municipalities along the Danube have designated building areas in flood plains in recent decades. Apart from that, the Bavarian state government has only completed two of the seven large flood polders that have been planned for over twenty years. Bavaria and the 15 other federal states are calling for the introduction of compulsory flood insurance, which is being rejected by many companies, including Allianz, due to fears of high costs.
Good business figures
As far as business figures are concerned, Allianz performed better than expected in the first half of the year. Operating profit in the second quarter rose by four percent to 3.93 billion euros, and in the first half of the year as a whole it was 7.9 billion. All three business areas – property and casualty insurance, life and private health insurance, and asset management – grew.
The target for the whole year is 13.8 to 15.8 billion in operating profit. However, Allianz – like its neighbour Munich Re – wants to remain cautious. It is too early to change the outlook, said Chief Financial Officer Claire Coste-Lapoutre.
Source: Stern
