Rising concern in France over nat cat risk amid climate change
Nine out of ten people in France are worried about weather-related events, and believe nat cat risks are getting worse in the country as a result of climate change, according to a new survey released in Paris.
The survey was conducted by opinionway, a public opinion research firm, under the commission of risk consultancy Stellant.
It identified big concerns among the French over secondary nat cat events that have also kept risk managers, insurers and reinsurers awake at night.
Almost half of those surveyed said they are worried about floods and 39% about droughts, both of which have afflicted the country with increasing frequency and severity.
Four of the five top risks flagged by the survey are nat cats. They also include wildfires, a concern for 38% of survey participants, and windstorms named by 33%.
The only non-climate-related threat in the top five list was, unsurprisingly, risk of disease and pandemics at 42%.
Didier Richert, the head of property risks at Stellant, pointed out that risk perception does not differ much from the reality of catastrophic losses in France.
He quoted data from CCR, France’s state-owned reinsurer, which shows that 57% of all nat cat insured losses in the country come from floods, and 34%, from droughts. It is estimated that nat cat events cause annual damages in France of between €10bn and €13bn a year, of which between €1.35bn and €1.65bn are absorbed by the insurance and reinsurance markets.
The survey also reveals that public opinion in France seems to be on the side of those who believe climate change is making the situation worse.
A total of 77% of those surveyed said that nat cat risks are on the rise in the country. One out of every three thinks this will hit their own regions more than five years from now, and 42% in just two to five years. A significant minority (14%) believe their region will be affected by more intense nat cat events in less than a year.
Some 89% of those surveyed expressed fears that their regions would see a higher number of nat cat losses at some point.
The pessimism may be explained by a recent increase in the reach of nat cat events across France. The number of local jurisdictions declaring a state of natural catastrophe emergency increased from 1,000 to 3,000 over the past three years, Mr Richert observed.
The survey is released as discussions are mounting about the need to revamp the French nat cat regime, which includes a reinsurance pool managed by CCR.
However, the survey seeds doubts on whether the French population will be amenable to taking on a higher financial burden to increase coverage levels. No less than 72% of the 1006 people surveyed said that they are not prepared to pay higher premiums for their home insurance in order to obtain extended nat cat protection.
