The floods that engulfed central Europe last month are expected to cost insurers about €3 billion and could be Germany's costliest natural disaster on record, reinsurer Munich Re said.
The world's biggest reinsurer said flooding affected not only Europe but also parts of Canada, Asia and Australia in the first half of the year and was responsible for nearly half of all natural catastrophe damage in that period.
Natural disasters of all types, from floods to devastating tornadoes in the United States, caused about $45 billion, or €35 billion, of economic losses, of which $13 billion were insured, Munich Re said in a review of natural catastrophes from January to June.
Flooding in central Europe was by far the most expensive catastrophe during the period, the reinsurer reported on Tuesday (9 July).
"The final size of claims is not yet clear, but it is well possible that it will end up being the most expensive natural catastrophe in German history," Peter Höppe, head of the firm's Geo Risks Research/Corporate Climate Centre, told the Süddeutsche Zeitung newspaper.
The estimated €3 billion in insured losses from last month's floods in Germany, Austria, the Czech Republic and other European states looks set to overtake the €2.6 billion in insured costs from major flooding along the Elbe in 2002.
Munich Re did not indicate what its own share of the losses would be, saying that it would release that data along with its second-quarter earnings report in August.
Economic damage from the floods in Central Europe was likely to be more than €12 billion, Munich Re said.
Reinsurers such as Munich Re and Swiss Re help insurance companies to cover the cost of heavy damage claims from disasters such as floods, hurricanes or earthquakes in exchange for part of the premiums the insurers charge their customers.
Floods have become increasingly frequent in central Europe but damage from them could be limited with better flood defences, Munich Re said, urging cross-border cooperation and better foresight by politicians.
A mix of hellish weather and prolonged dry spells in several EU countries in the summer of 2012 contributed to a global spike in food prices. The UN Food and Agricultural Organisation reported that food prices rose 6% overall in July, with maize soaring 23% and wheat up 19%.
The higher prices were mainly blamed on a devastating drought in the American heartland, drought and wildfires in parts of the EU and lower than expect wheat yields in Russia.
Prolonged dry spells have threatened parts of China, Russia, Australia, France, Spain, Portugal and the southern United States in recent years – affecting food output but also raising worries about the long-term stability of water supplies.