Daily Digest: European floods to cost reinsurers up to $3bn, Swiss Re in firing line, US launches 'stop ransomware' campaign

European floods to cost reinsurers up to $3bn
Severe floods across the European continent are likely to cost reinsurers between $2bn and $3bn, according to estimates by Berenberg. The new figures have emerged as central and western Europe battle the floods following the heaviest rainfall in a century. Germany has been the worst-affected country, but Switzerland, Belgium, Luxembourg and the Netherlands have also been hit by floods. From the more recent floods, Berenberg said it believes between $1bn and $2bn of losses are likely to come from Germany. Fitch estimates that these floods could add up to five percentage points to German non-life insurers’ net combined ratios.

Swiss Re most-hit reinsurer in previous European floods
Swiss Re was the reinsurer that suffered the largest losses from the last significant European floods, which occurred in 2013. The Swiss giant paid €600m ($708m), well above second-placed Munich Re’s payout of €350m, suggesting Swiss Re could yet again be the most exposed reinsurer to the ongoing European floods, UBS said. Hannover Re was in third place with losses of €230m, followed by Scor at €130m. UBS said these these data points “come with the caveats that portfolios have grown and changed materially since”. Among primary insurers, the biggest loser in 2013 was Allianz, which suffered a loss of around €800m.

US launches 'stop ransomware' campaign
The US Department of State will offer up to $10m to those who can help identify criminals engaged in cyber attacks against US infrastructure. The government has launched a website, stopransomware.gov, to provide the public with resources for countering the threat of cyber attacks. The new website has been launched as a response to a surge in attacks against companies by cyber criminals. The rewards are to be offered under the department’s Rewards for Justice programme, which will establish a tips-reporting mechanism to protect informants who manage to identify cyber attackers and/or their whereabouts. In addition, the Department of the Treasury’s Financial Crimes Enforcement Network (Fincen) plans to engage banks and technology companies to improve anti-money-laundering activities for cryptocurrency and speed up the tracing of ransomware payments.

MS Amlin, Liberty Mutual and Zurich sued for BI underpayment
MS Amlin, Liberty Mutual Insurance Europe and Zurich Insurance are being sued for £845m ($1.2bn) by pub company Stonegate. Stonegate alleges the insurers have downplayed their liability for the company’s coronavirus-related losses. Stonegate, which operates more than 700 bars and pubs across the UK, said in its claim in the High Court, which has just been made public, that its insurers do not dispute that provisions in their policies for business interruption were triggered by the public health crisis. However, it was reported MS Amlin, Liberty and Zurich are maintaining the insurance payout totals just £17.5m, of which £14.5m has already been paid.

'Lack of clarity' raises wind turbine fire threat
A lack of clarity between wind farm owners and turbine manufacturers as to who is ultimately responsible for fire risk management is putting renewable energy suppliers and their insurers at risk of business interruption and financial loss, loss prevention experts warn. The issue is acerbated by the widespread assumption technology has “designed out” the risk of fire. For example, most new turbine designs no longer incorporate elements that increase the risk of sparks, such as primary mechanical braking systems or failure protocols that result in rapid cycling of hydraulics or flammable materials that could fuel a fire.

Bootleg fire in Oregon grows to 476 square miles
Oregon’s Bootleg wildfire grew to 476 square miles over the weekend as the number of destroyed homes more than tripled to 67. The blaze, just north of the California border, is being fed by dry erratic winds that have hindered efforts of firefighters. Nevertheless, containment of the fire grew to 22% as of late Sunday. In addition to the destroyed homes, the Bootleg fire has also destroyed around 100 outbuildings and threatens thousands of other homes and structures. Elsewhere, the Tamarack fire near the California/Nevada border south of Lake Tahoe has grown to around 30 square miles and is threatening the town of Markleeville, California.

In this week’s Viewpoint section:

• Ellie Webb of Tokio Marine Kiln argues that life sciences carriers can expect a wave of pharmaceutical patent infringement claims. She believes those companies, and their insurers, have a duty to review any contracts that manage patent rights.

• Matthew Lightwood of the investment management firm Conning says insurers must integrate climate change regulation into their investment risk models, and proposes ways to do so

In other news:

• Mapfre records 11% growth in reinsurance

• Insurtech Kin announces a merger