Ahr Valley, Erftstadt When storm “Bernd” caused devastating floods in the Ahr Valley, Erftstadt and other regions almost a year ago, it was initially eerily quiet in the Zurich Insurance service center in Cologne. “That was very unusual,” recalls Horst Nussbaumer, Head of Claims at Zurich Germany. “We saw the events on television, but hardly any customers contacted us.” Normally, after a major hailstorm, the phones don’t stop ringing.
But this time things were different. The customers first had to save their belongings, they looked for missing family members and got themselves to safety. Only then did the desperate calls come: “My house is gone, what should I do?” These were existential questions that Zurich employees were confronted with. Many were overwhelmed, says Nussbaumer. Some even missed friends or relatives who lived in the flood region.
It’s been almost a year since, on the night of July 14th, immense floods of rain made entire regions uninhabitable. According to preliminary estimates, the overall economic damage in Europe is between 40 and 50 billion euros. The industry association GDV totals the insured damage caused by “Bernd” to household goods, commerce, industry and vehicles at around 8.2 billion euros. Never before have insurers in Germany had to pay more for damage from a natural catastrophe.
Insurers, scientists and consumer advocates are all clear: Such extreme storm events will not remain isolated cases. The damage could be even greater. “As a result of climate change, we will have to expect more and more extreme weather and serious damage in the future,” warns GDV General Manager Jörg Asmussen.
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Zurich board member Nussbaumer and his colleagues, who took a group of journalists to the Ahr Valley and Erftstadt a few days ago, want to raise public awareness. They want to show what went wrong in the past, how the recovery process can be improved and how damage from future natural disasters can be minimized.
The situation on the ground still looks depressing twelve months after the disaster. In the Telegrafenstraße in Bad Neuenahr, the waterline is still clearly visible on the houses several meters away from the Ahr. Many buildings have been gutted on the ground floor, the facades are broken, and reconstruction is progressing slowly.
The gravel pit was flooded during the flood disaster – when the soil broke off at the edge, several houses were destroyed.
(Photo: Handelsblatt/Schier)
Around 20 percent of the damage reported to Zurich Insurance has not yet been settled. There are not enough craftsmen and prices have risen massively, explains Nussbaumer. Banners reading “We’ll keep going” and “Our city will be colorful again” show that people don’t want to give up.
“Basically, I’m very much in favor of rebuilding the Ahr Valley,” says Michael Szönyi, head of Zurich Insurance’s flood resilience program. But you have to build differently and plan differently than before. Prevention, insurance protection and binding political rules are important.
1. Finally implement preventive measures
Viktor Rözer, a hydrologist at the London School of Economics, is calling for the preventive measures that have been discussed for decades to finally be implemented. Rözer contradicts the reading that last year’s flood was a singular, unpredictable event: “In 1804 and 1910 there were also strong floods with similar discharge volumes.”
Extensive flood protection plans were already in place in the 1920s. For example, they wanted to build retention basins in the upper Ahr valley. However, the plans were never implemented because there was no money.
Rözer recommends revising the current flood models and taking into account events that happened a long time ago as well as the future effects of climate change. In addition, more measuring stations for precipitation and river levels would have to be set up.
In addition, the traffic infrastructure was a problem in the Ahr valley last year. Many bridges had culverts that were too narrow. Camping vehicles got stuck in some passages until the masses of water ripped away the entire bridge and triggered another tidal wave.
There was a bridge here before the flood. It was destroyed in the flood disaster.
(Photo: Handelsblatt/Schier)
Many of the destroyed bridges have not yet been rebuilt. In Ahrweiler, the ruins of the old crossing stand next to the new makeshift bridge. For the reconstruction, Zurich manager Szonyi calls for an overall concept – which includes, for example, bridges with larger passages. Nussbaumer emphasizes that there should no longer be any new construction of residential buildings in areas that are particularly at risk.
The insurance board member has also learned lessons from the flood disaster for his own work: Crisis management must be improved, actionism does not help anyone. The first task must be to get an overview of the situation in order to then prioritize help for those affected.
2. Significantly increase insurance coverage
There are also discussions about the right insurance cover. Not even half of the homeowners in the Ahr Valley had taken out natural hazard insurance. Unlike normal home building insurance, this additional module also applies in the event of heavy rain, flooding and high water. For those affected, this meant that there can be no compensation for what is not insured.
Discussions between politicians and associations about a viable solution for insuring against natural hazards are still ongoing. The federal states recently spoke out in favor of compulsory insurance. The Advisory Council for Consumer Questions advocated compulsory basic insurance against natural hazards as early as February. Just as it existed in Baden-Württemberg until 1994.
But insurers see problems. In the end, constitutional implementation will only be possible with significantly reduced insurance cover, fears Jörg Asmussen, General Manager of the Association of the German Insurance Industry (GDV). Asmussen sees problems, for example, in high-risk buildings or in new buildings.
Instead, the GDV proposes a so-called opt-out model. The elementary protection would be automatically integrated into the residential building insurance, but the customer could deselect it.
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Some insurers have already created facts. For example, since February, Allianz has automatically offered its new customers integrated elementary insurance. However, the industry leader is also against compulsory insurance. “That would be fundamentally the wrong solution, because it would hide the individual risk of each individual customer and create no incentive for prevention,” says Frank Sommerfeld, head of Allianz property insurance.
Opponents and advocates of compulsory insurance have at least one problem in common: the willingness of homeowners to take out additional insurance has fallen significantly since the flood and is roughly at the same level as before the flood disaster.
Colorful ribbons commemorate the flood disaster about a year ago.
(Photo: Handelsblatt/Schier)
The colorful ribbons on the railings in Mayschoß that remind us of last summer’s flood don’t change that. Hydrologist Rözer demands that more such memories should be left behind – that houses and trees should be marked with water lines, for example, so that the disaster remains more present in the minds of the population.
3. Involve all house owners via pool solution
In Germany, few buildings are considered difficult or impossible to insure. The approximately 98,000 addresses that are acutely at risk can be precisely defined. They belong to the highest hazard class four in the zoning system for flooding, backwater and heavy rain (ZÜRS) developed by the GDV. There is a risk of flooding here at least once every ten years.
On the other hand, 92.8 percent of real estate and thus 20.4 million addresses are not affected by flooding from larger bodies of water. They are in category one.
However, this classification also has its critics. Heavy rain does not know any high-risk zones, but can affect almost every region in Germany, emphasizes the Association of Insured Persons (BdV).
On the Erft, for example, the situation was different than in the Ahr Valley. There was flooding in a wide area here, many transport routes were flooded. Unforgotten are the pictures of the gravel pit in Erftstadt-Blessem. A landslide created a huge crater and took parts of the residential area with it.
Almost a year after the flood disaster, gravel and site fences still characterize the picture.
(Photo: Handelsblatt/Schier)
In order to be able to offer homeowners in high-risk areas insurance protection, the consumer advocates from the BdV have proposed a collective compulsory system to politicians. Accordingly, the federal states should provide a pool solution together with the insurers.
In the process, homeowners would be hit with higher property taxes, and the additional revenue is intended to fund a risk pool organized by the states and operated by insurers. The plan provides that all property owners who take out elemental insurance will be exempt from the higher tax. Avoiding tax payments would also be an incentive to take out insurance.
“The countries would have to clearly define what should be secured,” says BdV chief economist Constantin Papaspyratos. High deductibles and limitations on insured benefits could allow homes in high-risk areas to be insured.
Nevertheless, there will still be major catastrophes in the future, the damage from which insurers cannot bear alone. According to BdV board member Stephen Rehmke, politicians should regulate the handling of such so-called accumulation risks in a binding manner and not – as has been the case up to now – promise unstructured emergency aid after a disaster.
How the Federal Government itself envisages a mandatory insurance solution is so far unclear. The Federal Ministry of Justice intends to present proposals by December.
More: Countries want compulsory insurance for elementary damage to buildings