In July 2021, Belgium was severely impacted by torrential rainfall, which caused heavy flooding throughout the Ardennes region and in parts of Flanders. Rainfall totals from mid-June through mid-July were nearly equal to long-term precipitation averages (1991-2020) for the entire summer months.
On 13 and 14 July 2021, record-breaking precipitation was reported in:
- Jalhay: 271.5 mm accumulated precipitation.
- Spa: 192.4 mm accumulated precipitation in Mont Rigi (Waimes) and 189.0 mm in Neu-Hattlich (Eupen).
The rain moved north on 15 July, causing 78.0 mm of accumulated precipitation in Buizingen (Halle) over a 24-hour period. Heavy rains also fell in Wallonia on 24 and 25 July.1
Human loss
At least 42 fatalities were attributed to the Belgian floods as of 29 July 2021.2
Impact on insurers
Since the July 2021 floods in Belgium, insurers received more than 71,000 claims with damages amounting to over EUR 2.1 billion. In addition to homes and buildings, 6,602 cars were damaged in the floods. Although some cars were repaired, most were irreparably damaged by water.3
The Wallonia Region suffered the greatest damage to insured buildings, estimated between EUR 1.3 billion and 1.7 billion:
- Insurers will pay EUR 590 million and Wallonia will pay the balance with a five-year, interest-free loan backed by insurers.
- This agreement creates one point of contact for claims and enables insurers to settle quickly and pay 100% of the incurred losses to their clients.
- Prior to the 2021 July floods, state contracts capped insurers’ losses at EUR 320 million. With the 2021 agreement, insurers are paying more than their state contracts dictate.4
Belgian retail fire insurance covers all material damage resulting from floods, except for residences built in risk areas as defined by the Belgian government gazette. This coverage also includes rebuilding preparation costs and temporary housing costs incurred during the construction period. Small and medium-sized enterprise fire insurance also covers flood risk on buildings.
Retail car insurance covers flood risk if the policy includes all-risk coverage. Flood damage to vehicles is covered via expanded car insurance, while commercial losses due to a halt or delay in services can be covered through commercial loss insurance.
AXA, one of the largest Belgian insurers, has added EUR 1.9 billion of specific European flood reinsurance to its natural catastrophe reinsurance programme for 2022 after the July 2021 flooding losses, as it shrank its European wind tower by 14% to EUR 2.5 billion.5
Outlook for the future
The Belgian National Crisis Center concludes that the risk of floods occurring will rise as a result of climate change. The risk of flooding of water flows (e.g. rivers) is deemed likely to occur, with very high impact. Flood risk stemming from local rain is deemed highly to occur with low impact, while floods from sea water will have very high impact, but are deemed unlikely to happen.6
Furthermore, population growth and the associated increase in residential buildings, particularly in some risky areas, will lead to higher financial impact from future floods. Measures, such as repairing and strategically moving of dykes are undertaken to mitigate these impacts.7
In addition to increased flood risk, the Belgian Meteorological Institute also expects and increasing number of more intense of heat waves, combined with longer periods of drought. Specifically for Brussels, calculations show that by 2100 the amount of heat waves can triple, with double intensity and 50% longer duration. The likelihood of extended periods of drought increases by a factor of five.8
For questions or more information on country-specific climate change and risk management, contact the author listed here or your usual Milliman consultant.
1 Meteo Belgie. Never Before Seen Floods in Belgium. Floods July 2021. Retrieved 11 March 2022 from https://www.meteobelgie.be/klimatologie/nieuws/la-suite/2309-watersnood-juli-2021.
2 HLN (29 July 2021). One of the last two missing persons found after floods in our country. Retrieved 11 March 2022 from https://www.hln.be/binnenland/een-van-de-twee-laatste-vermiste-personen-na-overstromingen-in-ons-land-teruggevonden~a4a4c681/.
3 Reinsurance News (11 November 2021). Belgium floods amount to €2.1 billion in damages. Retrieved 11 March 2022 from https://www.reinsurancene.ws/belgium-floods-amount-to-e2-1bn-in-damages/.
4 De Tijd. Insurers pay a significantly larger share of flood damage. Retrieved 11 March 2022 from https://www.tijd.be/ondernemen/financiele-diensten-verzekeringen/verzekeraars-betalen-fors-groter-deel-van-schade-overstromingen/10325476.html.
5 Insurance Insider (24 February 2022). Axa boosts European flood reinsurance cover amid treaty overhaul. Retrieved 11 March 2022 from https://www.insuranceinsider.com/article/29r92lbktbcs96n7ozsow/axa-boosts-european-flood-reinsurance-cover-amid-treaty-overhaul.
6 Crisiscentrum.be. Overstroming. Retrieved 23 March 2022 from https://crisiscentrum.be/nl/risicos-belgie/natuurlijke-risicos/overstroming.
7 Nieuwsblad.be. Ingrepen gepland om wateroverlast in de toekomst te verminderen. Retrieved 23 March 2022 from https://www.nieuwsblad.be/cnt/dmf20210716_95257229.
8 Vrt.be. Welk klimaat heeft België in 2100? 5 graden warmer, veel nattere winters en intensere hittegolven, waarschuwt KMI. Retrieved 23 March 2022 from https://www.vrt.be/vrtnws/nl/2020/10/14/klimaatrapport-kmi/.