New study on "The French and the climate risk" carried out by OpinionWay for the Stelliant group

These events are therefore on the risk assessment podium by 2024 with cyber-attacks and financial crises.^[1] For all these reasons, the Stelliant group, a major player in risk and claims management, wished to carry out, in partnership with OpinionWay, a study2 on “The French and climate risk”. The results of this study were revealed at a press conference in Paris, in light of the background and analysis by Didier Richert, Director of Personal Risks at Stelliant.

"The increase in the number of climatic events, in frequency and intensity, in a context of changes in the regulation of the CATNAT compensation regime, obliges all players in the insurance ecosystem to adapt and anticipate in order to even better support companies and individuals affected by these events " indicates Didier Richert, director of risks for individuals and one of the specialists in climate risk management at Stelliant.

Extreme weather events at the heart of French concerns

Nearly 9 out of 10 French people express their concerns about extreme weather conditions. Floods are their main concern (49%), followed by drought (39%), forest fires (38%) and storms (33%). The frost is a source of concern for only 3% of those questioned.

"This perception is justified and confirmed by the reality of the CATNAT cases that we take care of at Stelliant. The number of municipalities recognized in a state of CATNAT drought has tripled over the past three years and this trend will continue, or even increase with regard to the Climate change. Flooding is also likely to increase, as evidenced by certain recent and unseen phenomena: in France, Germany and Belgium this summer ".

Experts in the insurance world are indeed observing an increase in the frequency and intensity of climatic events in France. The increase in the population and its density in certain affected areas also leads to an increase in the number of people affected and, in fact, an increase in the amount of financial stakes.

If the current health context explains the concern of nearly 42% of people questioned for animal or plant pandemics, it should be remembered that nearly 75% of pathogens of human infectious diseases are of animal origin. Between 1940 and 2020, 160 new viral diseases were discovered, often resulting from contact between humans and animals: malaria, dengue and chikungunya viruses, Ebola, H1N1, Covid-19 and others to come ...^[2]

One in 5 French people say they are concerned about the seismic risk. Earthquakes are not widely publicized today in mainland France because, if the seismological networks record daily seismic activity, most of the time, these events are too weak to be felt by the population. The last event of this type that caused very significant damage was the Teil earthquake in November 2019. With a magnitude of 5,2 on the Richter scale, this shock caused Teil, the place of its epicenter, and its surroundings. , the collapse of more than a hundred buildings and considerable material damage.

"Although this is an area with a low population density, at Stelliant we have handled more than 2500 cases! The Caisse Centrale de Réassurance (CCR) assesses in extreme scenarios that the cost of an earthquake in Nice could generate costs of the order of 10 to 13 billion euros, without mentioning the human losses which would be dramatic " confirms Didier Richert.

In the SisFrance database ^[3], the Lambesc earthquake in 1909 remains the deadliest earthquake in mainland France. With a magnitude of 6,2 on the Richter scale, his death toll was 46 dead, 250 injured and nearly 1500 homes destroyed or damaged.

"If such an event happened again today in the same place, the strong urbanization of the area concerned would undoubtedly lead to a much heavier toll, of the order of several thousand deaths and several billion euros of damage " adds Didier Richert.

More than half of the people questioned (59%) express their feeling of living in a risk zone. Among these risks, climatic events (drought, storm, floods, frost and forest fires) come first and 24% of French people say they live in an area threatened by drought. Drought is particularly perceived as a threat by inhabitants of the south-east and the Mediterranean basin, where the most visible manifestation of the phenomenon is the increase in the frequency and violence of forest fires. The mapping of the drought risk in France published each year before the summer gives a completely different reality, with nearly 80% of the territory classified as a "very probable" or "probable" risk of drought.^[4]

"We can now observe an extension of the geographical areas affected by the drought to many departments that are no longer only located in the southern part of the territory. In 2020, the municipalities that have been the subject of state recognition CATNAT drought are moreover located mainly in the Paris region and in the center east. The number of recognized municipalities is greater each year, and the average of less than 1000 recognized municipalities per year is between 3 and 4000 over the last three years " specifies Didier Richert.

The sensitivity to the subject of drought is also linked to the strong media coverage of the subject, especially when an area is recognized in a state of natural disaster by means of a decree, as is currently the case in a large number of municipalities. from northern France. This is the importance of the role of the expert, a true investigator, who will look for the possible causes of the apparent damage, from the age of the building, the method and the construction or foundation materials, to the types of construction. soils and basements, neighboring buildings and activities ... All the buildings are working and have microcracks, the materials age, the bearing capacity of the soil changes with periods of frost and thaw. Often drought is an indicator and not the cause of cracks.

Natural disasters: current and future challenges for the French

77% of those questioned believe that this risk of natural disaster has increased in recent years. The increase in the number of natural disasters as well as the scale of them is indeed a reality. If the phenomena of droughts are one of the most visible manifestations of global warming, as well as the risk of fire which is more present in the affected areas, storms^[5] and floods are also consequences of this global disruption, directly linked to the warming of the oceans and the disruption of the maritime currents that regulate the climate. The recent floods in Germany and Belgium, in less than 48 hours caused the death of more than 200 people and the destruction of several thousand homes and infrastructure. Germany has announced that it will devote 30 billion Euros to repairing the damage caused. There hadn't been such severe thunderstorms for 150 years.

"We expect at Stelliant to see a sharp increase in this type of claims. This is why we are strengthening our skills through targeted training and continuously improving the performance of our EGA (Large Scale Events) unit. An on-call system is in place within the Group. More than 40 experts can thus be mobilized in a very short period of time, without disrupting the operation of the company " explains Didier Richert.

In France, the recent floods in the Vésubie and Roya valleys in October 2020 are also a dramatic manifestation of global warming. Unprecedented precipitation there caused the hundred-year flooding of several rivers and devastating floods and considerable damage. Stelliant experts, mobilized quickly to find solutions for the victims of this historic event, had to show great agility in difficult access conditions to the affected areas.

"Several of our experts had to walk for hours to reach the place, which had become inaccessible by car, and sleep in an improvised base camp to carry out field reconnaissance because all the buildings were destroyed" complete Didier Richert.

Among the French believing they live in an area at risk of natural disaster, 89% feel that this threat could increase in the future. More specifically, 14% anticipate that the risks of natural disasters could increase within a year in their area of ​​residence, 42% that they could increase within 2 to 5 years and 33% that they risk falling. increase in the longer term. 29% of French people who say they live in an area currently protected from the risk of natural disaster think that this could change in the more or less long term. A quarter of those questioned have already considered moving to avoid being confronted with the risks of natural disasters. Of these people, 40% have already suffered a disaster of this type.

Prevention and repair: dissatisfaction or ignorance?

The concern related to natural disasters is not unfounded since nearly one in two French people (46%) say they have already suffered at least one claim related to such events. The majority of them mention claims related to climatic events: storms for 26%, drought for 20%, frost for 18% and floods for 16% of them. Following a natural disaster: 74% of French people believe that the public authorities are not up to the task of quickly offering emergency solutions to victims and 81% are dissatisfied with the actions taken to effectively repair and compensate the damage caused .

After having counted at the beginning of May on an inflation of 173% of premiums linked to the CATNAT system by 2050, the Caisse Centrale de Réassurance (CCR) announced in its annual report that natural disasters in France in 2020 cost between 1,35 and 1,65 billion euros to insurers, calling on this occasion for a reinforcement of the means of prevention.

In the event of a claim, the French would mainly expect their insurer to pay for the work (70%), temporary relocation (58%) and compensation for the costs of cleaning, clearing or disinfecting the damaged areas (49%). To a lesser extent, they also count on taking charge of their rent or repayment of their loan (32%), on the loan of a vehicle (12%) and on compensation for other costs related to the disaster. : moving furniture (12%), architect or technical inspection fees (11%), lost foodstuffs (11%).

"Insurers pay for the work to repair the damage caused. However, current regulations do not allow them to cover certain costs such as loss of use of a property and rehousing. A modification of the regime for natural disasters is in progress and would make it possible to correct certain shortcomings. It is important to remember that beyond compensation, the French expect services (cleaning, clearing etc.). At Stelliant, we have developed additional services to expertise (decontamination, drainage, in-kind repair, etc.) to better meet the expectations of insurers and their customers, " comments Didier Richert.

Even if the French are aware of the risks that extreme weather events can represent, their homes are rarely equipped accordingly. Thus, only 40% of French people believe that their home is equipped to withstand frost. Prevention is however a non-negligible element in the management of the risk of natural disaster, and depending on the risks, if it has a "collective" facet correlated with the action of the public authorities (municipal flood prevention plans for example), in in some cases, common sense measures, such as emptying the radiators of an unoccupied dwelling during the winter to guard against risks linked to frost. The fire risk, related to the drought risk is also increasing and the evolution of the nature of fires, fed by vegetation and drier soil, is at the origin of fires which sometimes render the preventive measures in force obsolete. .

If the first instinct of the French would be to turn to their insurance in the event of a claim, only 24% of those questioned believe that they are sufficiently insured against climate risks. 24% consider that their current coverage is insufficient and 52% admit not knowing if their insurance covers these risks.

"The dissatisfaction can have several explanations. Some policyholders may for example not have been eligible for the drought guarantee, or their rehousing may not have been taken care of because of the regulations currently in force. If it is understandable. that an insured presupposes the coverage of cracks that have appeared in a property located in a municipality recognized by a CNS decree, examination of our data shows that 60 to 70% of declarations concerning this phenomenon are not attributable to drought but aging of the frame " indicates Didier Richert.

To protect themselves from the risks associated with natural disasters, 26% of French people would be ready to pay more for their home insurance and would accept on average an increase of 11% to cover these risks, while 72% reject this option.

"It is difficult today to imagine that the cost of the CATNAT share of insurance policy premiums will not increase while the frequency and intensity of climatic events are in full expansion. modification of the scheme which seems to go towards a wider coverage of guarantees, therefore a higher cost for insurance companies, will not fail to fuel premium inflation. The CATNAT premium also derives from the compensation scheme and its The annual amount is between around twenty euros for an individual and around one hundred euros for a company. In 2019, for the fifth consecutive year, the result of the technical account of the natural catastrophes branch of insurance is negative. is not exorbitant in light of the sums potentially incurred when a disaster occurs ", specifies Didier Richert.

In its last report published on August 9, the IPCC foresees in all its scenarios the exceeding of the threshold of 1,5 ° C in the next ten or twenty years. This warming will undoubtedly lead to an increase in the frequency of climatic hazards, spared areas could also now be affected by extreme phenomena. The impact will be heavy for the community, but also for insurers: by 2050, the cost of claims related to climatic hazards could be multiplied by a factor of two to five, estimated the Prudential Supervisory Authority and resolution. Extreme weather events such as floods and drought are among the natural disasters most feared by the French. More than one in two respondents consider themselves potentially threatened by these events in their place of residence. Many French people share the feeling that the risk of being confronted with a natural disaster has increased in recent years in France. They also have in mind that areas that are rather unspoiled today could be affected in the future. The study also reveals that the French lack information on existing assistance in the event of a disaster on their housing and many do not know how to cope with these risks.

"It is a certainty, there is a need for information, upstream and outside of the occurrence of these events which allows the insured to know what it is possible to do by nature of risk. This is the reason why, during a natural disaster, the commitment of experts, both technical and educational, is total. More perhaps than in other claims, the expert has a deeply human role to support the insured, reassure him and put in place adapted solutions for a rapid return to a normalized situation and to more serenity ” concludes Didier Richert.

^[1] Source: Mapping of emerging risks for the insurance and reinsurance profession - FFA 2 This study was carried out on a sample of 1006 people, representative of the French population aged 18 and over, constituted according to the method quotas, with regard to the criteria of sex, age, socio-professional category, category of agglomeration and region of residence. The interviews were carried out by self-administered online questionnaire on CAWI (Computer Assisted Web Interview) system. The interviews were conducted from August 18 to 19, 2021.

^[2] Source: Arnaud Fontanet, head of the epidemiology of emerging diseases unit at the Institut Pasteur

^[3] Harmonized computer database maintained by a consortium including BRGM (Bureau of Geological and Mining Research), EDF (Electricity de France) and IRSN (Institute for Radiation Protection and Nuclear Safety).

^[4] https://www.ecologie.gouv.fr/face-au-risque-secheresse-nouveaux-outils-preparer-lete

^[5] Damage caused by storms is not covered by the Natural Catastrophe cover but by the storm cover: Under the terms of the law initiated in July 1982, the effects of natural disasters are considered to be "direct uninsurable material damage having had the decisive cause l abnormal intensity of a natural agent when the usual measures to be taken to prevent such damage could not prevent their occurrence or could not be taken ”(Article L. 125-1 paragraph 3 of the Insurance Code).

It should be noted that the damage caused by the wind was definitively excluded from the scope of the natural disasters regime by the law of June 25, 1990. Indeed, this law allowed the generalization of the storm cover by making compulsory the cover of the damage. resulting from the effects of wind due to storms, hurricanes and cyclones for any person holding an insurance contract covering fire damage.