Natural disasters in Aude: “Identify possible phenomena of selection, disengagement or departure of insurers”

How to characterize the impact of natural disasters?

In just a few years, we have been able to see the evidence of climate change and the associated exponential weather phenomena, of unprecedented frequency and intensity. The public authorities have taken up the subject and launched a mission in 2023 on the insurability of climate risks. The three experts responsible for developing recommendations to adapt the French insurance system to changing climate risks submitted their report last April to the Government. Among their recommendations, the challenge of maintaining insurance accessible to all, strengthening the prevention of natural risks and adaptation to climate change constitute the central priorities. This relationship is fundamental. It is of high quality and was not only published but also acted upon, which is worth noting: some of the recommended measures have already been implemented such as the increase in the Cat Nat surcharge or the implementation work of an Insurability Observatory, entrusted to CCR this summer by the Government (and launched on October 17, Editor's note).

What are the ambitions of the observatory?

Its aim is to contribute to maintaining insurability in the face of natural disasters in all territories, metropolitan and overseas. It will allow us to identify possible phenomena of selection, disengagement or departure of insurers from certain areas particularly exposed to climatic hazards.

To do this, we will superimpose two maps: a first map of risks, hazards, with flooding by overflow and runoff, marine submersion, geotechnical drought (clay shrinkage-swelling, RGA), cyclones and a second map reflecting the presence and the market shares of insurers in order to measure possible signs of concentration – that is to say when there are too few insurers present in an area such as for example in the overseas territories subject to cyclones – and selection , that is to say disengagement. It should indeed be noted that the damage insurance market, whether for auto or home, is very competitive in France with many players, whether large or small, with market shares which, barring exceptions, do not do not exceed certain thresholds; a significant disengagement at the end of which a few insurers accumulate the vast majority of market shares or even remain the only ones operating in certain areas can therefore hardly go unnoticed. We plan to publish a first annual report in the first half of 2025. We will never disclose the names of the companies […] who have withdrawn from certain areas, our contractual agreements in particular formally prohibiting us from doing so. The objective is not to make name and shame. We must also determine the restitution mesh to carry out this Observatory, so that the result is as relevant as possible.

Is Aude one of the sectors where the question of insurability already arises?

It is clear that we are experiencing throughout France, not just in the Mediterranean, a succession of particularly intense climatic hazards, even unprecedented on our territory. In France, in terms of hazards, we are particularly affected by drought and the now known phenomenon of clay shrinkage (RGA) which is now the first ahead of the most traditional floods. This concerns houses built on clay soils which, under the effect of episodes of extreme drought and rain, shrink and then swell like a sponge. […] With climate change, this phenomenon is now spreading almost everywhere […] Our country is also particularly subject to regular flooding by overflow and runoff. […] And it is indeed true that the Mediterranean constitutes a particular subject: beyond the accelerated warming of this medium-sized sea, which will generate episodes particularly in the Cévennes such as those that we have just suffered, it is also an area at high seismic risk (Nice in particular) and with a specific drought issue in the Gulf of Lion.