2024 European floods: a watershed moment for reinsurance

Two major flood events have significantly impacted Europe in 2024 thus far with insured losses cumulatively of up to €4 billion: the €1.7 billion insured loss floods of May/June in Germany and the early September event impacting Austria, Hungary, Poland and Czechia currently with a €1.9 to €2.3 billion insured loss estimate. These follow major loss events of 2002, 2013 and 2021 impacting Germany and Central Europe, and the specifically Central European-impacting events in 1997 and 2010. 

Additionally, smaller but notable loss events have occurred in Italy and Slovenia over the past 12 to 18 months. While these resulted in lower absolute losses, they were still impactful for those markets.

Tim Edwards, managing director and head of international catastrophe & actuarial analytics, Howden Re International Treaty, shared his insights on the impact of the 2024 European floods and how cedants and reinsurers face an increased need to adjust approaches to risk quantification and mitigation given the heightened loss activity in Europe from atmospheric-driven perils subject to changes in climate.

Escalating impact of ‘earnings-driving’ perils in Europe

“Earnings-driving” perils as they are collectively known, have become a dominant force in driving insurance losses across Europe. 

“The floods this year have been a stark reminder that earnings-driving perils in Europe are collectively the primary drivers of loss,” said Edwards. 

“Over the past 10 years, two-thirds of all insured nat cat losses in Europe have come from flood or hail, which is a material increase from the previous 10 years.”

Challenges for cedants 

The escalating costs of flood and hail damage, along with other “attritional” catastrophe perils such as freeze, snow-melt or subsidence, present significant challenges for European cedants. 

Edwards emphasises that traditional risk models, which rely heavily on historical data, are increasingly insufficient for quantifying current and future risks in a world where the climate is changing.

“We can demonstrate that historical data, for some regions and perils, is no longer a reliable predictor of future risk,” Edwards explained. “We need to extend catastrophe and actuarial-based models to be representative of present day climate conditions, not just those observed in history.”

The increased retention levels cedants are having to bear compound the impact of these earnings-driving perils. At today’s levels, by Howden Re calculations, cedants globally are retaining an additional $15 billion of nat cat losses net than compared to 2022 retention levels—for an average year of nat cat activity.

“Historical data is no longer a reliable predictor of future risk.”

Innovative solutions for flood risk

In light of these challenges, cedants and reinsurers must explore new ways to manage flood risk, not just relying on traditional reinsurance and/or underwriting exclusions to avoid the problems posed by increased volatility. Edwards stressed the importance of innovative reinsurance solutions and investment in technologies that enable granular underwriting decisions in response to variations and changes to climate.

Flood risk assessment should also consider both the continued increase in exposure and the evolution of mitigative actions. During the early September floods of Central Europe the benefits of the construction of the Raciborz Dolny flood control reservoir on the Oder river were seen, when it successfully managed to flatten the peak of the incoming flood wave. The event taking place had been widely compared against the 1997 floods where 40 percent of Wroclaw was inundated. 

Investments in flood defences such as the Raciborz Dolny flood control reservoir, since the 1997 and 2002 floods, substantially improved the impact of the heavy precipitation and river flooding acting to mitigate losses.

Figure 1: Insured and uninsured losses from flood events from 1994 to 2024

Tim Edwards is managing director and head of international catastrophe & actuarial analytics, Howden Re International Treaty. He can be contacted at: email

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