Central Europe Floods August 2002

The meteorological conditions that triggered the flooding throughout central Europe during August 2002 were not exceptional. However, it would seem that the damage and destruction that was caused to the historic city of Prague in the Czech Republic amongst other locations, was on an unprecedented scale. The total economic losses that arose from the floods have been estimated to be in the region of 55 billion euros. In light of the flooding the European Union agreed to set up a permanent fund, which will be made available in the event of future ‘natural’ disasters. Estimates of total insured losses are between 1.5 billion and 3 billion euros, however, there were many uninsured losses resulting in an over-reliance on financial assistance from relevant government bodies. It is suggested that in light of these recent flood events, governments should reassess the role of the insurance industry in providing flood cover and likewise review the nature of the partnership with the industry in order to maximise the benefit for society as a whole.

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