While urban violence causes significant damage in Martinique and New Caledonia, insurance companies are seeing the bill rise. Some are half-heartedly threatening to leave overseas territories, which are also on the front line in the face of climate change, the consequences of which are particularly difficult to ensure.
“The State must find solutions or, ultimately, there will be no more insurers in the Overseas Territories,” warned the Last October 7 Jean-Laurent Granier, president of the Generali insurance company. His company is present in New Caledonia, where the damage caused by the crisis that began last May amounts to billions of euros. Jean-Laurent Granier calls into question the State and its inability to maintain order.
“Effectively, if the order is not respected, then the insurance economy cannot function: there is no longer any risk if there are repeated riots,” note Christophe Delcamp, director of Damage and Liability Insurance at France Assureurs, the main federation of insurance companies in France. Because social tensions regularly cause destruction in overseas territories and these territories are on the front line facing climate change, will insurers end up deserting overseas territories?
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©Noémie Dutertre/ NC La 1ère
Already in 2020, the General Inspectorate of Finance noted in a report that “Overseas can scare insurers, with markets that are too small and have particular characteristics, given risks considered excessive.” For his part, Christophe Delcamp assures that there is no “no difficulties overseas”, while recognizing that if the insurer “considers that certain events are too frequent, which are certain to occur, it can adapt its insurance coverage, see its presence in certain territories.”
“The insurer will analyze the risk exposure, whether in Nice or Guadeloupe, explains Christophe Delcamp. Overseas territories are exposed to a large number of climatic hazards, volcanic eruptions, cyclones, landslides, floods…” But in theory these hazards do not slow down insurance companies, since they are covered by the natural disaster guarantee. This system, almost unique in the world, is a “public-private” insurance system financed by a tax on insurance contracts. The franchise is the same, in France as in Overseas. But while extreme events are increasing, the system is struggling to finance itself. The tax, previously set at 12%, will increase to 20% from 1is next January, to take into account the consequences of climate change.
The natural disaster guarantee does not insure all the risks linked to climate change: you cannot insure your property against sargassum for example, nor against rising sea levels. The scheme covers direct damage, but this does not It's not the stranding of algae that directly damages household appliances, but the lack of collection that causes it to rot. “Same thing for the retreat of the coastline. The insurance is based on the hazard, the phenomenon must be random. However, unfortunately, the retreat of the coastline is not a random phenomenon, it is a certain phenomenon: all the coasts of the world are threatened”, explains Christophe Delcamp.
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©Mickaël Bastide
Insuring property against the effects of climate change is particularly complex : not only does a landslide have multifactorial causes, but disasters are more or less unpredictable and their consequences difficult to anticipate, hence the difficulty for insurers to provision funds for this type of risk.
According to the General Inspectorate of Finance, there are already fewer insurers in the Overseas Territories than elsewhere in France. In 2020, only four insurers shared 70% of the overseas market. In France, such a market share is occupied by 11 insurance companies.
It is sometimes difficult for those who want to make sure to find a franchise. Last year, Madi Madi Souf, the mayor of Pamandzi, in Mayotte, was worried to see Mahorais individuals forced to turn to insurance companies in Reunion. “With the problems we are currently experiencing, burned cars, burned houses, individuals have difficulty obtaining insurance,” he explained, fearing that municipalities must, in the long term, do the same.
What to do if certain territories become uninsurable because riots or looting become too frequent ? In a report published last March, Senator Jean-François Husson proposed drawing inspiration from the natural disaster regime to better manage the risk of urban damage, and submitted the idea of a “riot recognition order “, as there are orders recognizing the state of natural disaster.
