Major floods across eastern and southern Spain are expected to be among the country’s costliest insurance events, with initial estimates well above €1 billion ($1.65 billion).

The floods last week followed severe storms and rainfall, with thousands of homes affected and more than 200 people killed, making it one of Europe’s deadliest floods since 2000.  

Valencia, which has more than 2.5 million residents, received more than a month’s rainfall in 24 hours on October 29, with several rivers overflowing.  

Aon’s initial analysis anticipates “substantial financial losses”, with property, industrial, commercial and agricultural sectors expected to be heavily hit.  

The assessment notes about 77% of households in the Valencia province have home cover – 3% more than the national average.

“As assessments continue and the event progresses in other regions of the peninsula, the insurance sector is bracing for potentially one of the costliest events in Spain on record,” Aon said. “Insured damages will be covered by the insurance consortium (Consorcio de Compensacion de Seguros) and private insurers, while agricultural damage is covered through Agroseguro.”  

Credit rating agency Morningstar DBRS says it is too early for an exact loss estimate but it expects the figure will be “several billion euros”.