It had been impatiently awaited for weeks by players in the insurance world. On April 2, the report entitled “Adapt the French insurance system to changing climate risks” has finally been published. Commissioned by the government from Thierry Langreney, expert in the world of insurance and president of Ateliers du futur, it identifies avenues to avoid the crash. That of the Cat Nat regime, the mechanism which allows compensation for victims of natural disasters for which coverage is not provided for by home and/or automobile insurance contracts: floods and marine submersions, land movements, droughts and their consequences on buildings, earthquakes, etc.
Like the federation of insurance companies (France Assureurs…
It had been impatiently awaited for weeks by players in the insurance world. On April 2, the report entitled “Adapt the French insurance system to changing climate risks” has finally been published. Commissioned by the government from Thierry Langreney, expert in the world of insurance and president of Ateliers du futur, it identifies avenues to avoid the crash. That of the Cat Nat regime, the mechanism which allows compensation for victims of natural disasters for which coverage is not provided for by home and/or automobile insurance contracts: floods and marine submersions, land movements, droughts and their consequences on buildings, earthquakes, etc.
As the federation of insurance companies (France Assureurs) recently reported, the surge in extreme climate-related events is causing compensation to surge. Insurers paid out 6.5 billion euros in 2023 on this register, the third highest in terms of cost after 1999 – marked by the two storms Lothar and Martin – and 2022. The heaviness of the bill has nothing to do with the situation . As the climate changes, the damage increases. And that’s just the beginning. “The increase in claims due to climate alone would be between 27% and 62% on average by 2050,” states the report based on projections from the Central Reinsurance Fund, the pivotal institution of the Cat Nat regime. . It is she who covers 50% of the compensation, or even more, in the event of recognition of the state of natural disaster.
A doubling for marine submersions
Estimates are marked by uncertainty. On the scale of warming and extreme events, but also on the number of potential victims – coastlines continue to be populated, for example – and on the conditions of compensation in the future. Nevertheless, the report outlines the extent of the damage in 2050. The loss ratio linked to marine submergence, a phenomenon as well known as it has been feared in Charente-Maritime since the Xynthia storm in February 2010, could double to approach 150 million euros per year. That of floods would evolve in a range of +27% to +43%.
A silent disaster that affects many house owners in New Aquitaine, the shrinkage-swelling of clay following episodes of drought is set to become the most expensive peril: 466 million euros in 2000, 726 million euros annually at present, between 1.2 and 2.1 billion euros in 2050… Other damage could prove formidable. “Hail events, with large hailstones, will be increasing,” the report notes.
Even before these depressing omens turn into reality, funding for the Cat Nat scheme is not following suit. Fueled by additional premiums of 12% on multi-risk home contracts and 6% for car insurance, it is worth 3.8 billion euros annually. Insufficient. “But the rate of surcharges will increase on January 1, 2025, which will release an additional 1.2 billion euros,” recalls Pascal Chapelon, the president of Agéa, the federation of general insurance agents.
Surcharges will increase
This is indeed the first recommendation of the Langreney report, nimbly adopted by the government at the end of December 2023. Next year, the home premium will increase to 20%, that on the car contract to 9%. They have not changed since the year 2000. But it will not be a panacea. The report calls for an update of 1% per year to counter the growing effects of climate change.
Correcting this structural imbalance is an essential prerequisite, according to the document. Otherwise “insurers may be tempted, to protect themselves, to adopt strategies to avoid areas with greater exposure to natural hazards”. In short, to abandon sectors “where the expected cost of claims and their management is exorbitant” in relation to the economics of contracts.
On the same subject
Saints facing floods: our file
5.42 meters on November 13, 2023, 6.08 meters on December 17, 2023 and 5.54 meters on Wednesday March 6, 2024. The floods this winter experienced three peaks on the scale of the Palissy bridge and the Saintais had their feet in water. Is climate change to blame? Why was Saintes partly built in the bed of the river? Should we rethink the city? “Sud Ouest” attempts to answer these questions.
“Some insurers behave very well, others very badly, particularly in the bancassurance sector. Some victims are treated without humanity”
In Saintes, in Charente-Maritime, where morale has been damaged by three episodes of flooding in the Charente since the start of winter, there are fears of a desertion of this type. “Some insurers behave very well, others very badly, particularly in the bancassurance sector. Some victims are treated without humanity. The experts are slow to arrive, the time for rehousing is running out… Saintais have been told that after this flood, they will have to manage with another company. Insurance is being dumped on the city, as if I had the means to remedy the problems,” protests the mayor, Bruno Drapron, who threatens to publicly denounce companies suspected of bad will.
France in green, orange and red
Eager to preserve the principle of solidarity between policyholders who are very exposed to risks and those who are less exposed, the Langreney report suggests looking at a map that would go from green (low risk) to orange (high risk) up to red (very high hazard) across the entire national territory. In red zones, second homes, rental properties and high-value professional property could be subject to derogatory rules: freely setting the level of the Cat Nat surcharge and deductibles. This is to encourage policyholders to protect themselves against risks. Parts of the coastline threatened by flooding would obviously be affected.
If Pascal Chapelon is reserved on this last recommendation, he welcomes the emphasis placed on prevention and adaptation to climate change to contain the cost of damage, whether to communities or individuals. This desire to anticipate would result, among other things, in the establishment of a new fund linked to the retreat of the coastline, an erosive phenomenon distinct from submersion. It would help finance the relocation of goods promised to be swallowed up. “This is above all a political decision,” writes Thierry Langreney on this subject which has caused a lot of ink to flow.
2024-04-04 11:41:02
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