May 21st, 2010

Floods in Central and Eastern Europe

Posted at 9:10 AM ET

middle-europe-flooding-smallHeavy rain has triggered severe floods in parts of central and eastern Europe over the last week, killing at least nine people, inundating homes and businesses and causing widespread damage and disruption. Parts of Poland, Hungary, the Czech Republic and Slovak Republic have been flooded after days of heavy rain burst river banks and inundated low-lying areas. The heavy rain was accompanied by strong winds, causing power outages and transportation disruption. Reports said southern Poland was worst-affected after the Vistula River burst its banks. Poland’s Prime Minister, Donald Tusk, said the damage caused by the flooding could cost more than EUR2 billion (USD2.5 billion).

At least seven people have been killed in Poland and reports said the floods are the worst to hit the country in 10 years. Television footage showed stranded residents being rescued from rooftops by helicopter and Prime Minister Tusk said tens of thousands of people would be affected by the floods. The Prime Minister announced that EUR120 million (USD 150 million) from the government would be used to help flood victims, although he has reportedly ruled out the declaration of a natural disaster for the country. Although the flood waters are now receding in southern areas of Poland, more flooding is expected in the capital of Warsaw. The depth of the Vistula River is expected to reach a 60 year high of 7.8 meters (25 feet) by May 21 in Warsaw, and reports said flood waters have already entered some riverside restaurants. Experts have reportedly expressed fears that the already soaked flood-protection banks in the capital may fail when the peak flood wave arrives.

middle-europe-flooding-big1

Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or Instrat® representative for assistance or go to www.i-axs.info for further information.

Reports said hundreds of properties were flooded in southern regions of Poland (including Slaskie, Podkarpackie, Opolskie, Swietokrizyskie and Malopolskie), prompting thousands of people to be evacuated from their homes. Around 4,000 residents were evacuated in the southeastern town of Sandomierz after the Vistula burst its banks, and widespread flooding was also reported in the city of Krakow. It was reported that 500 people were evacuated in Krakow after the Vistula broke its banks on reaching a height of nearly 10 meters (33 feet), its highest level in 40 years. Reports said that flooding in Southern Poland forced the short-term shutdown of some power stations and car manufacturers. Meanwhile, in the southwest, flood waters were heading down the River Oder to the regional hub of Wroclaw. According to AXCO, flood insurance penetration in Poland is around 40 percent and reports said some 9,000 flood-related claims have already been filed.

Hungary, the Czech Republic and the Slovak Republic have also been hit badly by the floods. Hungarian Prime Minister Gordon Bajnai declared a state of emergency in northeastern regions after one person died and more than 2,000 people were evacuated from their homes. The flooding also disrupted rail services in many parts of Hungary, while several towns in the northeast were unreachable. Reports said record flood levels were measured at several rivers, including the Bodva, Hernad, Zagyva, Tarna, Ipoly and Sajo. The Hungarian Chamber of Agriculture said 150,000 hectares of land has been flooded, and the damage to agricultural production will run into the millions of euros.

The situation also was serious in northeastern regions of the Czech Republic, where the rising waters of the Becva River flooded several towns, including 90 percent of Troubky. Hundreds of people were forced to evacuate their flooded homes in the northeast of the Czech Republic and thousands of properties lost power. One person was killed in the Czech Republic and the Moravia-Silesia region declared a state of emergency. According to the Czech Insurers Association (CAP), the insured damage from the floods is expected to reach around CZK932 million (EUR36 million). Flooding was also reported in the neighboring Slovak Republic, where the government deployed up to 3,700 soldiers alongside emergency services in the worst affected areas in the east and northwest of the country.

Sources: Reuters News, BBC News, Associated Press, Agence France Presse, Europolitics, MTI - EcoNews, CIA - Daily News, PAP Market Insider, CTK Daily News, The Financial Times, Polish News Bulletin, Czech Insurers Association (CAP). 

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