The July 2021 floods were the most averted natural disaster in the history of Luxembourg, the Minister of Finance told the Chamber on Thursday, in response to a broader question from MP Charel Margue.
Yuriko Backes explained that the solution of a fund for the prevention and management of natural disasters requires very significant financing capacities. The Luxembourg insurance sector could not take care of this alone, because the market is too small.
“Because of the size of our country, it is also difficult to create risk pooling”, stressed the minister. Yet this would be the basic principle of such a fund for natural disasters.
The heavy rainfall in July 2021 would have shown that in a small country, all regions would quickly be affected. This is why a specific intervention of the State in the event of disaster would be the best solution. However, there would have been discussions with the insurance sector to analyze the best insurance models for citizens.
The Minister further affirmed that the floods of July 2021 were the most necessary natural disaster in the history of Luxembourg. They cost 133 million euros to insurers and the State, 30.5 million to date out of the envelope of 100 million, which he had made available.