One year ago, at the annual conference of the French risk and insurance management association AMRAE, the feeling among risk managers was that they had been in firefighting mode for the last two years, struggling to stay ahead of one crisis after another.
Unfortunately, this feeling is unlikely to have changed judging by the comments of AMRAE’s two vice-presidents, Francois Beaume and Alain Ronot. “And so it goes on and on and on… We have one wish for 2024: let’s look for stabilisation!”
Instability has been everywhere in 2023 – in the global economy, in geopolitics and in the climate. In November 2023, Storm Ciaran left a million French homes and businesses without power and claimed five French lives as it battered western Europe. It is estimated the cost of damage across western France exceeded €1.3bn.
The extreme weather has continued in 2024. In January, heavy rainfall in northern and western France led to more evacuations. For companies and residents in the Pas-de-Calais region, there have been two 10-year floods in the space of two months. And according to climatologists, the extreme weather is set to continue. As weather forecaster François Gourand said: “It’s only logical that rainfall will become more frequent and intense”.
The increased risk of natural catastrophe as a result of climate change has also had significant insurance implications for businesses and municipalities alike. As of January 2024, more than 2,000 towns and cities across France have found themselves uninsured as insurers have either raised rates or discontinued coverage, according to the association of French mayors.
In its annual report on the state of the market, AMRAE highlighted the lack of capacity in certain lines as the most concerning trend. The association expects property with exposure to natural catastrophe to see a reduction in capacity of 30% in 2024, while rates and deductibles will increase by the same amount.
It is not just the insurance market where there is a capacity problem. For example, the cost and waiting times for replacing machinery have both increased; the availability of spare parts has declined, as has the number of skilled mechanics and mechanics in general.
It is therefore critical that companies have a recovery plan in place should the worst happen. Furthermore, companies should also have their service providers in place. In the aftermath of a natural catastrophe, there are rarely enough resources to meet the demand for recovery.
The lack of restoration companies, insurers and other service providers was exposed for all to see by the floods, contributing to the commercial trauma experienced by so many small and medium enterprises. Consequently, the recent storms have shown why risk managers must try to get ahead of the crisis and how a solution like BELFOR’s RED ALERT is of critical importance in today’s market.
BELFOR’s RED ALERT service is structured to work alongside companies’ response plans and emergency procedures so that recovery can be more rapid and effective, and that any gaps in business continuity plans can be minimised. It also secures access to critical resources during a company’s hour of need.
- BELFOR covers entire supply chains across all continents.
- RED ALERT® clients receive exclusive access to a dedicated hotline.
- RED ALERT® clients enjoy priority status. In the event of a national disaster and increased demand, RED ALERT® clients skip the line and get served first.
- No two businesses or even industries are alike. This is why BELFOR’s experts bring in specialist knowledge and experience of all businesses, being able to customise their services before, during and after a business interruption.
- By their nature, emergencies create uncertainty. RED ALERT® supports companies in defining their appropriate level of service, which corresponds to their prevention planning, making their business more resilient.
- The first hours following a disaster are crucial. Step-by-step protocols tailored to the client’s needs reduce the impact of any business interruption. That way, companies are ideally prepared for both minor incidents and worst-case scenarios.
In recognition of the growing risks faced by French companies, BELFOR has significantly strengthened its presence in the French market over the last two years with multiple acquisitions, expanding its geographical reach and services to meet customers’ needs.
BELFOR is attending this year’s AMRAE meeting of French risk and insurance managers in Deauville, where the rise in natural catastrophes and decline in insurance capacity, along with the growing need for companies to manage their own risk, are all on the agenda.