Suffering from a “structural dysfunction”, notably due to lack of competition, the community insurance market must find “life”, estimates a Senate report on Thursday, while many communities are no longer able to insure themselves despite the increase climate risks.
According to a consultation carried out in February by senators, 60% of the 713 respondents encountered at least one significant problem with their insurer.
Since January 1, 2023, 20% have had their contract terminated at the initiative of their insurer, with two months’ notice in 11% of cases.
In addition, almost a quarter received no response to the call for tenders launched to find an insurer, and 29% saw their contract subject to a matching amendment, for 94% of them , an increase in contributions.
These difficulties affect all communities, rural or urban, affected or not by the riots of summer 2023, even if those with more than 5,000 inhabitants are more affected.
This generalization of the phenomenon and the fact that the difficulties date back before the year 2023 demonstrate that the tensions in the insurance market of local authorities result from structural dysfunctions much more than from the level of losses of the communities or their exposure to risks, analysis The report.
In particular, the lack of competition with a single insurer: Groupama for those with less than 10,000 inhabitants and SMACL for the others.
In the absence of an alternative, communities are in practice forced to comply in the event of a price increase or other contractual changes.
Added to this is a very aggressive pricing policy from SMACL, committed to a race for volume to become number 1and a price war under the notable influence of European insurers.
The amount of premiums thus paradoxically decreased significantly between 2017 and 2022 even as the loss ratio increased.
As a result, insuring communities has harmed the profitability of the market (…), which insurers have ended up deserting, the senators conclude.
In this already degraded context, climatic events and violent social movements appear to reveal a situation that already existed.
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Already on the rise, the risks will also increase further.
Between 1989 and 2019, a total of 74 billion euros in compensation was paid in France for all climate events. They could reach 143 billion euros between 2020 and 2050.
The senators make 15 proposals, including the need to guarantee market competition.
They call on communities to better understand their insured assets and propose creating a system to compensate for the risk of riots.
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