The devastating floods that hit Brazil’s Rio Grande do Sul state in May have left a trail of destruction, with nearly 200 lives lost and thousands of people displaced. As the floodwaters recede, the financial impact of the disaster is becoming clearer, with preliminary estimates putting the cost at R $1.7 billion (USD $330 million).
According to the National Confederation of Insurers (CNseg), the insurance sector has already received 23,441 claims related to the floods, making it one of the largest insurance claim events in the country’s history. Auto insurance claims account for 35% of the total, amounting to around R $557 million (USD $107 million), while home insurance claims make up 48% of the total, with damages valued at R $293 million (USD $146 million).
Despite the significant number of claims already filed, CNseg President Dyogo Oliveira expects these numbers to rise in the coming weeks as people begin to assess the full extent of the damage. He noted that many policyholders have yet to report their claims as they focus on more immediate concerns like survival and salvaging personal belongings.
The floods have also had a significant impact on the automotive sector, with around 200,000 vehicles lost, including nearly 3,000 brand new units still on dealership lots. Despite the anticipated surge in indemnification requests, Oliveira reassured the public that the insurance sector is well-prepared to handle the situation, with claims being processed in an average of 48 hours.
Looking ahead, Oliveira emphasized the need for better disaster prevention and response systems in Brazil to mitigate the impact of future extreme weather events. He called for improved infrastructure and construction standards to make buildings and roads more resilient to floods and other natural disasters.
Overall, the floods in Rio Grande do Sul have already been labeled as the largest compensation event in the insurance sector’s history in Brazil. Insurers are urging public authorities to prioritize disaster preparedness and infrastructure resilience to prevent similar tragedies in the future.