Insured losses in Germany from flooding in July could reach EUR5bn, according to estimates from cat modelling firm, AIR Worldwide.

Significant flooding in Central Europe from 13th to 18th July took a particular tool on Germany’s Rhineland-Palatinate and North Rhine-Westphalia regions, which experienced historic rainfall. Bavaria, Thuringia and Saxony were all affected by localised flooding.

All along the Ahr River, homes were flooded and bridges were broken; in the village of Schuld most buildings were destroyed. Also heavily affected were the mountainous areas in the border region between the southeasternmost region of Germany and the Austrian states of Salzburg and Tirol.

The restoration of infrastructure could take weeks or even months, according to some estimates, which could lead to loss inflation effects.

Included in AIR’s estimates are losses to insured physical damage to residential, commercial, industrial, auto and agri property, both structures and their contents, from both on- and off-floodplain flooding. Other countries and regions that experienced flooding include Belgium, Switzerland, Austria, Luxembourg and the Netherlands (although these regions are not included in AIR’s loss estimate).

AIR's analysts also note that many reinsurance contracts are subject to hours clauses (typically 504 for flood events); and that, given the duration of this event, they expect the flood to be treated as a single occurrence in Germany.

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