Rtl today – in Luxembourg: insurance premiums could increase following floods
Marc Hengen, managing director of the ACA (Association of Insurance and Reinsurance Companies), was RTL’s guest this Friday morning. He returned to the impact of the natural disaster on the future of insurance in Luxembourg.
More than 90% of the cases relating to the damage caused by the floods last July are now closed, some are behind schedule due to repair work which could not be carried out directly.
“125 million euros is the highest amount of damages paid by insurance companies in Luxembourg”, declared the managing director of the ACA.
PRICE INCREASE ?
The natural disaster cost insurance ten times more than the first ones collected for the insured risk. Thanks to the principle of reinsurance, companies do not have to worry too much about the financial side. But reinsurance comes at a price, and it depends on how events unfold. As insurance has to operate profitably, it is quite possible that these costs will be passed on to customers, depending on the rise in the prices of different insurance premiums. A decision that will have to be made by each company, according to Marc Hengen of the ACA.
HIGHLY PRIZED FLOOD INSURANCE
After the floods in July, this type of insurance saw a sharp increase in demand from the public, even those who are not located in areas prone to flooding. This option, which is not mandatory, has existed since 2017.
The year 2021 remains synonymous with recovery for insurance companies, their situation having returned to the level of 2019, therefore before the pandemic. The sector is obviously looking at new risks such as extreme phenomena or cyber attacks. Continuous analyzes allow the insurance sector to prepare as well as possible for future challenges and to anticipate the future as little as possible, as with digital technology for example, a key element in the survival of the economy during the pandemic thanks to the telework.