This German election looked likely to be a dull affair. The Christian Democrats (CDU) were soaring in the polls, having overcome a briefly interesting surge by the Greens, who were settling into second after a summer of bad headlines. The languishing Social Democrats (SDP) had extended their decade-long decline into third place, their chancellor candidate Olaf Scholz described by The Guardian as having “…all the charisma of a middle-ranking bank clerk”. That was until the floods.

From mid-July, a series of gaffes by the CDU’s Armin Laschet amid Germany’s worst natural disaster in half a century set the scene for what is looking like a perfectly timed SDP surge. Mr Scholz has the highest approval ratings of the frontrunners and is succeeding mainly by being statesmanlike as others fall around him. His party seems to be peeling votes from CDU supporters who are looking for a steady hand to succeed Angela Merkel, as well as perhaps re-acquiring some voters lost to the Greens in the last few years. The first polls have now put the SDP ahead of the CDU, a recipe that, if it holds, might allow for a left-leaning ‘traffic light’ coalition of the SDP, Greens and liberal FDP, banishing the CDU to opposition.

Of course, there is some time to go yet: the vote is on September 26, and lengthy and complex negotiations will probably follow. Momentum is with Mr Scholz, but the SDP’s support may be soft given its quick rise. If an SDP-led coalition emerges, expect minimum wage increases and new wealth taxes, while Green involvement would bring a robust climate change policy. A traffic light coalition would include the FDP but if the SDP continue to surge, a harder left coalition including Die Linke becomes possible, if tricky to negotiate. If Mr Scholz can lead his party’s charge to power, things could be about to change for Germany. One thing’s for sure: this election won’t be boring.

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The German elections will herald a new Bundestag and a new Chancellor, will this impact the insurance market? Discover more in Axco's insurance market report