“We have the GREATEST risk of flooding in Europe!” – reported an insurance professional club, the Insurance Analysis Center, which cited data from recent decades as evidence of this.
As they wrote, “Vienna has already fallen, while the water level of the Danube continues to rise. This does not mean anything good for the river section in Hungary, especially since the flood exposure in Hungary is much greater than that of our western neighbor. In Europe, our country’s flood exposure is the highest. This is accompanied by decades-old flood protection problems, which may backfire even in the case of the current flood wave”.
They added that Hungary’s vulnerability to water damage is basically determined by the fact that “it lies in the deepest part of the Carpathian Basin and is thus the catchment area of the surrounding mountains”.
However, few people know how big the danger really is. Our country has a flood exposure of more than 30 percent, which is by far the highest value in Europe
– they stated, adding that “almost 23 percent of the country’s territory is made up of floodplains along rivers and 10 percent along small watercourses (!). Almost a third of this area is home to 700 settlements, 2 million people live here, and 15 percent of the public roads and 32 percent of the railways run here”.
They also noted that “how to protect and deal with damages, in the case of Hungary – despite all this – is still only contingent today. The maintenance of protection works, the failure to clean the drainage ditches and culverts, their utilization (plowing) for agricultural purposes, which causes further flooding and internal water damage, are a constantly recurring problem. “It is also a problem that many (currently uninsured, exposed to floods and flash floods) residential properties are located within the floodplains of rivers, for which the domestic insurance institutions – by definition – do not undertake insurance coverage,” they wrote.
Finally, it was also noted that the domestic risk management system is not the best either, and now the issue may come to the fore again, “however, this would require governmental coordination, because the self-regulation of the market cannot work with adequate results here.”
Since the peak of the Danube is only expected around September 20th and a continuous rise in the water level can be expected until then, it is easy to imagine that the previous highest water level of the Danube (891 centimeters – at Budapest) may also fall and we will again have to face a large-scale disaster similar to the flood of 2010
– concluded their post, in which they also described the damage caused by previous floods in Hungary.
Insurers pay almost nothing for damages, but they can still prepare for losses
Meanwhile, Portfolio also wrote in an article that, according to market analysts, the current flood could cause damages of tens of billions for insurance companies,
at the same time, an even bigger problem may be that almost nothing is insured against possible flood damage.
As they wrote, a natural market failure is that “insurers do not take risks for losses for which, according to their actuarial calculations, their clients could only be covered at an unaffordable rate, or for which they themselves cannot use reinsurance at an affordable price.”
In this regard, the experiences of two previous large floods were cited as examples:
- In 2010, 3.6 percent of the economic damages incurred,
- In 2013, insurance companies reimbursed 2.2 percent of it.
#Index #Flooding #Hungary #neighboring #countries #minutebyminute #coverage #Index
2024-09-16 15:41:22