Climate change in Germany: Are we ready for the next floods?

Climate change in Germany: Are we ready for the next floods?

In 2024, Bavaria and Baden-Württemberg experienced devastating flood damage, indicating an increasing frequency of extreme weather events. The Cash Online reports that experts agree that Germany is inadequately prepared for future extreme weather events. Over the last 20 to 25 years, the insurance industry has recorded a remarkable increase in losses from such natural events.

The year 2023/24 was particularly important due to severe Christmas floods in Lower Saxony and Bavaria. During this time, property damage totaled an impressive 5.6 billion euros. A look at the statistics shows that damage from extreme weather has increased by 75% over the last two decades, averaging 3% per year.

Preparing for climate impacts

The implementation of preventive measures in construction and politics remains inadequate. Around 1,500 new buildings are built in flood zones every year, while there is an urgent need to provide information about risks and insurance protection. Consumers often believe they are well protected with their homeowners insurance without being aware of critical coverage gaps.

Natural hazard insurance in Germany has increased from 19% to around 56% since the end of the 1990s, but there is still a need for comprehensive information. In Lower Saxony, the insurance rate for natural damage in a brokerage company is an impressive 84%.

Growing challenges for the insurance industry

According to the General Association of German Insurers, represented by Alexander Küsel, the challenges caused by climate change are getting worse. The insurance industry is faced with capacity problems and rising premiums. There are fears that without preventive measures, homeowners insurance premiums could even double due to climate change.

A central concern is the question of the affordability of natural hazard damage. The discussion about how the state and insurers share responsibility fairly is essential. Suggestions for improving insurance protection include, among other things, clear core protection and higher deductibles. A holistic approach that includes both homeowner responsibility and government measures is required.

Example solutions from other countries, such as Florida and California, demonstrate the strain that storms and other extreme weather events can place on insurance. Where climate adaptation is undoubtedly necessary, a central natural hazards portal is also required to make risks more transparent.

In summary, it can be said that the insurance world is facing major challenges: climate change and the associated natural hazards not only require innovative insurance solutions, but also significant investments in prevention and education. Martin Jordi, a prevention specialist, is already observing a trend in Switzerland towards buildings with higher resilience standards, which could serve as a positive example for Germany. The MDR highlights that without such measures, premiums will rise in the long term and the supply situation for consumers will remain tense.