After unanimously adopting the report of the fact-finding mission on the insurance problems of local authorities on March 27, the Senate Finance Committee requested the Competition Authority to examine this “atrophied” sector. » and “quasi-monopolistic”. Furthermore, the senators urgently request an extension of the powers of the Insurance Ombudsman.
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« It’s urgent ! The difficulties are growing and from next July 1, a significant number of communities risk finding themselves in great difficulty, not to say in an impasse. », after terminations or end of contract, worries the rapporteur of the information mission on the insurance problems of local authorities of the Senate, Jean-François Husson. The senator from Meurthe-et-Moselle, an insurance agent by profession, led, along with 16 other senators, a mission in “ very tight deadlines » (the mission began its work on January 30, 2024) to try to provide solutions « relevant » and in the very short term to communities.
Major phenomenon
The works “ confirm the extent of community insurance problems », indicated Jean-François Husson during the presentation of his report to the press on March 28. The mission collected 713 contributions during an online consultation of elected officials between January 31 and February 28: lack of response to calls for tenders (for 24% of respondents), high prices, increase in bonus amounts (94 % have suffered an increase in their contributions) and deductibles (24% of respondents), difficulties in the execution of contracts (48% mention a deterioration of the relationship with their insurer over the last ten years).
Since January 1, 2023, 20% of responding communities have suffered a contract termination at the initiative of the insurer, underlines the report.
The mission noted that the most problematic insurance concerned “damage to property” which is non-obligatory but essential insurance. Only 9% of responding communities practice self-insurance compared to 91% who use property damage insurance contracts.
If the insurance problem of communities is general, municipalities with more than 5,000 inhabitants “suffer more strongly the deterioration of their relationship with their insurer”, according to the report.
Insurers have led communities into a dead end
But the senators were surprised by the real causes of this crisis: “ The riots of the summer of 2023 or the recent climatic events were only the revealer of a pre-existing problem. The real fact detrimental to communities is in fact the atrophy of the insurance market with an almost total absence of competition, linked only to the behavior of insurers and absolutely not to communities or to the increase in claims in these communities. Without competition, communities find themselves in a form of impasse, totally subject to the decisions of their insurer or even to the absence of insurers. »
This ” market atrophy » results, according to the work of the mission, from a “ very aggressive policy of Smacl, engaged in a “race for volume” to become number one without having sufficiently sound management to allow it, and a price war under the notable influence of European insurers who untimely entered this market before withdrawing from it. » The consequence today is “ a market divided into two segments, each of which is dominated by a single insurer: Groupama for communities of less than 10,000 inhabitants, Smacl Assurances SA for the others », today backed by Maif.
Structural problem
In other words, the problem encountered today by communities comes, according to the mission, from the very structure of the insurance market and not from an increase in claims, as insurers have been able to suggest until now. The figures announced on March 27 by France Assureur (the insurance federation) seem to confirm the conclusions of the senatorial mission: in 2023, climate disasters in France will cost 6.5 billion euros. Certainly this cost is increasing, but it remains lower than the year 1999, marked by the Lothar and Martin storms (13.8 billion euros in constant euros) and the year 2022 (10 billion euros).
The reinsurers interviewed by the mission showed themselves “ confident ”, according to the rapporteur. “ They have toughened their conditions in terms of protection and security ”, to be able to guarantee coverage of claims. But they also explained that the market exists and “ that it is cyclical “. On the other hand, they alerted senators to other risks: climatic events, cyber risks, riots and popular movements, the latter two risks being “ insufficiently mature, that is to say difficult to master and for which we do not know the extent. On riots and popular movements, I would say that it is everyone’s business », estimates Jean-François Husson, because “ in countries that are in good health, where there is dynamics, there are no social tensions ».
Community actions
Based on these analyses, the mission made fifteen proposals (unanimously adopted on March 27 by the Senate Finance Committee), the most emblematic of which is to urgently extend the powers of the Insurance Mediator (with a scope seems wider than the option activated in the fall of 2023 by the government). “ We must allow it to intervene more quickly and better. He is the ideal interlocutor to put the players back around the table and improve relationships. He can consult the market again, loosen the grip. It could be contacted by the communities and would have an obligation of means to find an insurance solution for the communities. »
The mission would also like to oblige insurers to indicate their intention to terminate a contract at least six months before the expiry and to indicate the reason.
Communities, if they are the victims, can also manage to improve the situation. They ” must implement actions aimed at better understanding their assets to be insured, better identifying their risks and preventing them as best as possible, in order to negotiate markets as close as possible to their real needs and at the best cost », recommends the report. They must also accept more of the franchise system to “ allow the refocusing of contracts on the main risks, the reduction of their cost » and manage small risks themselves. They also have a lot of work to do on prevention and with agents in the use, for example, of vehicles.
The State must also take its part, according to the mission. The legal affairs department of the Ministries of Economy and Finance could update its guide on public procurement and provide advice to ensure better dialogue with insurers in the context of public procurement. In the meantime, the mission has taken the lead and published a Practical guide for communities for the award of public insurance contracts.
Solidarity grant
On a financial level, the State could draw from the reserve of 40 million euros set aside for the solidarity grant to communities affected by climatic or geological events (DSEC). This allocation could be extended to cases of riots. “ This would be a neutral operation for the state’s finances since these 40 million entered in the state budget are almost never spent. », suggests Jean-François Husson.
It is also up to the State to take up proposals from the senatorial mission and the mission assigned by the government to Alain Chrétien, mayor of Vesoul, and to Jean-Yves Dagès, former president of the national federation Groupama. Their report is expected at the beginning of April.
The senators wish to review the operating conditions of the insurance market. In addition to the adoption of the fact-finding mission report, the Senate Finance Committee also contacted the Competition Authority so that it could give its opinion and possibly propose “ measures capable of remedying possible dysfunctions identified, and in particular those making it possible to stimulate competition in the insurance sector of local authorities », We can read in the referral letter.
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2024-03-29 23:27:00
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