Lehrstuhl fr Brgerliches Recht Privatversicherungsrecht Wirtschaftsrecht und Rechtsvergleichung

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Flood Risks and their Insurance in Germany AIDA Climate Change Working Party, Copenhangen, 11. 6. 2015

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) The Phenomenon Flood in Germany Statistics and Developments Insurance Solutions Outline

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) The Phenomenon Flood

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Flood as a Cultural Phenomenon in Germany Elbe River – Eastern Germany, Impressions

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) German North Sea Coast, 2013 Impressions

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Areas

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Culture Prof. Dr. Oliver Brand, LL. M. (Cambridge) The Grey Horse Rider (Schimmelreiter), 1888 Theodor Storm

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Politics Prof. Dr. Oliver Brand, LL. M. (Cambridge) The Grey Rider (Schimmelreiter), 1888 Hamburg, 17 February 1962 Storm Senator Theodor Helmut Schmidt,

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Politics Prof. Dr. Oliver Brand, LL. M. (Cambridge) Oder River, 22 July 1997 Federal The Grey Rider (Schimmelreiter), 1888 Gerhard Schröder, Chancellor Theodor Storm

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Statistics & Developments

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Unfall

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Unfall

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Impact Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Greatest Loss Potential (total value, insured values): Rhine Valley § High percentage of uninsured property: public property (e. g. dykes, roads, bridges, public buildings) § Rising percentage of insured property of enterprises

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Statistics

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Development Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Mild increase of insured events over the years (below the international trend) and insured losses § Reasons - Most floods are river floods and therefore more readily defensible - Use of buildings (e. g. ground floors of bulidings along the river Mosel) - Protective measures in buildings (e. g. mobilizing goods, switch of heating away from oil) - Public information (e. g. insured losses cut in half between identical floodings in Cologne 1993 and 1995) § Yet (GDV, 2011): Increase of insured losses of about 50% over the next 60 years due to climate change (flash floods, tornadoes)

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Public Precautions Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Gesetz zur Verbesserung des vorbeugenden Hochwasserschutzes of 3 May 2005 (BGBl. part I No. 26, p. 1224) - states have to organise renaturalisation of meadows - states have to effect reduced settlement to endangered zones - states have to effect removal or reduction of dangerous goods in affected ares § Public awareness campaigns § Encouragement of early warning systems - technical - animal based (new development)

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Individual Precautions Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Living outside flood affected areas - particularly in smaller towns and villages along the Elbe and the Oder - to a much smaller degree in historic settlements and larger cities (e. g. Cologne, Erfurt, Hamburg) § Protective measures and early warning systems § Insurance

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Individual Precautions Prof. Dr. Oliver Brand, LL. M. (Cambridge) § At the time of the 2002 floods, only 5% of buildings and 10% of building contents in Germany were covered by natural disaster insurance - Trend towards increased levels of insurance § Reasons for the weak demand - Government had routinely provided aid for reconstruction in past disasters - In fact, this assistance was reduced by the authorities if the person affected could expect compensation from an insurance policy - Public policy unchanged

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Insurance Soltions

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Problems Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Large loss potential, cumulative losses (area impact) § High variation of exposure within short distance (difficult to model) § Flood control structures (e. g. dykes) make floods rare, but have almost no effect during extreme events § Loss of awareness and feeling of security § Adverse selection (only those, who feel threatened by a flood, have interest in insurance cover = spatial and temporal risk compensation endangered

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung German Solutions Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Definition of zones according to exposure level (country-wide for all areas) > ZÜRS § Exclusion of particularly exposed areas (Zone 4) § Insurance package including coverage for other natural hazards (geographical spread of risk) § Adequately structured insurance contracts including deductibles and limits § Re-insurance § Encouragement of measures for individual loss reduction (GDV brochures and awareness campaigns, etc. )

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung German Solutions Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Not executed so far: Mandatory insurance schemes (like in 19 cantons of Switzerland France) § Government request of research after the 2002 floods § French Model (law of 1982): - Mandatory coverage for nature-related risks with the unerlying property insurance coverage (P: high premiums/withdrawal) - Mandatory premium add-on of 12% set by government ordinance - Re-insurance option at the governmentally held Caisse Centrale de Réassurance (CCR) - P: French government decides after each natural disaster event whether the law applies

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung ZÜRS Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Zoning System for Flooding [“Überschwemmung”], Backwater [“Rückstau”] and Heavy Rains [“Starkregen”] § Flood scenarios are simulated by a computer, reconciled with actual claims data and aerial views of past floods § Allows calculation of premiums based on risk

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Policies Prof. Dr. Oliver Brand, LL. M. (Cambridge) § Flood coverage can be obtained for about 94% of areas in Germany § Since 1994: Extension of regular products of building and household insurance (Erweiterte Elementarschadenversicherung – EESV); e. g. Besondere Bedingungen fu r die Versicherung weiterer Elementarscha den (BWE 2010) (= Special conditions for the insurance of further damages caused by the elements) Available under http: //www. gdv. de/wp-content/uploads/ 2014/07/0420_Besondere-Bedingungen-fuer-die-Versicherungweiterer-Elementarschaeden-BWE 2010_2014. pdf § Opt-in and opt-out models, bundling flood with earthquakes, volcanic activities, rain torrent, avalanches and snow pressure; not costal storm surges, however (§ 10 BWE 2010) But since 9/2014: Itzehoer in co-operation with Aon. Benfield

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Policies Prof. Dr. Oliver Brand, LL. M. (Cambridge) § The German insurance market does not have (government-ordered) standard premiums or pre-defined deductibles. Typical deductible on the market: 10% of the compensation due, though no less than € 500, - and no more than € 5. 000, Very important for quick reaction of insurers (impact of a lack of deductibles can be readily seen with the 1990 flood in Bavaria) § Common “Obliegenheiten” (obligations of the insured person, § 11 BWE) - Control of waste water and other pipes - Storage conditions (x cm above ground)

Lehrstuhl für Bürgerliches Recht, Privatversicherungsrecht, Wirtschaftsrecht und Rechtsvergleichung Prof. Dr. Oliver Brand, LL. M. (Cambridge) Thank you for kindly paying attention! Prof. Dr. Oliver Brand, LL. M. (Cantab. ) Contact: brand. uni-mannheim. de/kontakt facebook. com (Lehrstuhl Brand an der Uni Mannheim) oliver. brand@uni-mannheim. de +49 (621) 181 1363