{"id":14217,"date":"2024-09-02T16:00:20","date_gmt":"2024-09-02T14:00:20","guid":{"rendered":"https:\/\/trustrc.com\/?p=14217"},"modified":"2024-09-02T16:00:20","modified_gmt":"2024-09-02T14:00:20","slug":"natcat-in-france-updates","status":"publish","type":"post","link":"https:\/\/trustrc.com\/en\/natcat-in-france-updates\/","title":{"rendered":"NATCAT in France: Updates"},"content":{"rendered":"<p><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><div class=\"fusion-builder-row fusion-row fusion-flex-align-items-flex-start fusion-flex-content-wrap\" style=\"max-width:1216.8px;margin-left: calc(-4% \/ 2 );margin-right: calc(-4% \/ 2 );\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:100%;--awb-margin-top-large:0px;--awb-spacing-right-large:1.92%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:1.92%;--awb-width-medium:100%;--awb-order-medium:0;--awb-spacing-right-medium:1.92%;--awb-spacing-left-medium:1.92%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><div class=\"fusion-text fusion-text-1\"><p>In France, the Natural Catastrophe Compensation Scheme, commonly known as NATCAT, has been a cornerstone of disaster management since its establishment in the 1980s. This scheme guarantees compensation for material damage caused by natural phenomena such as floods, droughts, and more. French law mandates that all insurance policies covering property in France\u2014whether for motor fleets, industrial risks, or household policies\u2014include coverage for such damages.<\/p>\n<p><strong><span style=\"color: #32287d;\">Overview of the Scheme<\/span><\/strong><\/p>\n<p>The NATCAT scheme is a collaborative effort between the public and private sectors. It is funded through an additional premium applied to all property insurance contracts. This premium reflects the principle of solidarity, as all policyholders contribute to the financing of the scheme, regardless of their individual risk exposure. The French public reinsurer, Caisse Centrale de R\u00e9assurance (CCR), provides reinsurance with unlimited coverage, backed by a state guarantee.<\/p>\n<p>Key aspects of the scheme include:<\/p>\n<ul>\n<li>Each French insurer has the option to reinsure these risks with the CCR.<\/li>\n<li>Insurers transfer these additional premiums to the CCR, either partially or in full.<\/li>\n<li>The French government guarantees the CCR to ensure the payment of claims.<\/li>\n<\/ul>\n<p><strong><span style=\"color: #32287d;\">Rising Costs and Adjustments<\/span><\/strong><\/p>\n<p>The NATCAT scheme faces increasing financial pressures due to the rising costs of natural disasters. The total cost of damage from natural disasters in France was \u20ac10 billion in 2022 and \u20ac6.5 billion in 2023, both significantly higher than the annual average of \u20ac3.7 billion recorded between 2010 and 2019. To address these financial challenges, the French government will increase the additional premiums applied to property damage policies from January 1, 2025.<\/p>\n<p><strong><span style=\"color: #32287d;\">New Rates Effective January 1, 2025<\/span><\/strong><\/p>\n<ul>\n<li><strong>For non-life policies (commercial and residential):<\/strong> The additional premium rate will rise from 12% to 20%.<\/li>\n<li><strong>For motor insurance (theft and fire coverage):<\/strong> The rate will increase from 6% to 9%.<\/li>\n<\/ul>\n<p>These new rates were announced by the French government on December 28, 2023.<\/p>\n<p><span style=\"color: #32287d;\"><strong>Reasons for the Increase<\/strong><\/span><\/p>\n<p>The increase in rates aims to ensure the long-term stability of the NATCAT compensation scheme. This adjustment is necessary due to the structural growth in the frequency and intensity of natural disasters, particularly floods and droughts.<\/p>\n<p><span style=\"color: #32287d;\"><strong>Historical Data and Impact<\/strong><\/span><\/p>\n<p>From 1982 to 2022, the annual average cost of natural disaster claims was \u20ac1.2 billion. However, between 2016 and 2022, this average rose to \u20ac2.5 billion. Despite a total payout of \u20ac1.88 billion in 2022, the scheme has been running at a deficit since 2016. The cumulative deficit from 2015 to 2019 is \u20ac1 billion, with a notable deficit of \u20ac439 million in 2017. Consequently, the CCR\u2019s reserves have decreased by 30% over the past five years.<\/p>\n<p><span style=\"color: #32287d;\"><strong>Implications for Clients<\/strong><\/span><\/p>\n<p>The increase in rates will lead to higher premiums for all clients starting January 1, 2025. It is important to note that these changes do not directly benefit insurers, as they are required to transfer a significant portion of the premiums to the CCR, which manages the scheme.<\/p>\n<\/div><\/div><\/div><\/div><\/div><div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-2 fusion-flex-container has-pattern-background has-mask-background nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"--awb-border-radius-top-left:0px;--awb-border-radius-top-right:0px;--awb-border-radius-bottom-right:0px;--awb-border-radius-bottom-left:0px;--awb-flex-wrap:wrap;\" ><div class=\"fusion-builder-row fusion-row fusion-flex-align-items-flex-start fusion-flex-content-wrap\" style=\"max-width:1216.8px;margin-left: calc(-4% \/ 2 );margin-right: calc(-4% \/ 2 );\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-1 fusion_builder_column_1_1 1_1 fusion-flex-column\" style=\"--awb-bg-size:cover;--awb-width-large:100%;--awb-margin-top-large:0px;--awb-spacing-right-large:1.92%;--awb-margin-bottom-large:20px;--awb-spacing-left-large:1.92%;--awb-width-medium:100%;--awb-order-medium:0;--awb-spacing-right-medium:1.92%;--awb-spacing-left-medium:1.92%;--awb-width-small:100%;--awb-order-small:0;--awb-spacing-right-small:1.92%;--awb-spacing-left-small:1.92%;\"><div class=\"fusion-column-wrapper fusion-column-has-shadow fusion-flex-justify-content-flex-start fusion-content-layout-column\"><div class=\"fusion-text fusion-text-2\"><p><strong>Source: \u00a0<a href=\"https:\/\/verlingue.fr\/en\/\" target=\"_new\" rel=\"noopener\">Verlingue<\/a><\/strong><\/p>\n<p><strong>Further Information<\/strong><\/p>\n<p>For more details on these changes and their implications, you can refer to the following sources:<\/p>\n<ul>\n<li><a target=\"_new\" rel=\"noopener\">Publication of Decrees Strengthening the Natural Disaster Compensation Scheme<\/a><\/li>\n<li><a href=\"https:\/\/www.economie.gouv.fr\/actualites\/rapport-mieux-assurer-francais-changement-climatique\" target=\"_new\" rel=\"noopener\">French Ministry of Economy Report on Insuring Against Climate Change<\/a><\/li>\n<\/ul>\n<\/div><div class=\"fusion-image-element \" style=\"text-align:center;--awb-caption-title-font-family:var(--h2_typography-font-family);--awb-caption-title-font-weight:var(--h2_typography-font-weight);--awb-caption-title-font-style:var(--h2_typography-font-style);--awb-caption-title-size:var(--h2_typography-font-size);--awb-caption-title-transform:var(--h2_typography-text-transform);--awb-caption-title-line-height:var(--h2_typography-line-height);--awb-caption-title-letter-spacing:var(--h2_typography-letter-spacing);\"><span class=\" fusion-imageframe imageframe-none imageframe-1 hover-type-none\"><a class=\"fusion-no-lightbox\" href=\"https:\/\/www.cinco.az\/\" target=\"_self\" aria-label=\"Verlingue UK\"><img decoding=\"async\" width=\"300\" height=\"69\" src=\"https:\/\/trustrc.com\/wp-content\/uploads\/2021\/02\/Verlingue-UK-300x69.png\" alt class=\"img-responsive wp-image-9003\" srcset=\"https:\/\/trustrc.com\/wp-content\/uploads\/2021\/02\/Verlingue-UK-200x46.png 200w, https:\/\/trustrc.com\/wp-content\/uploads\/2021\/02\/Verlingue-UK-400x92.png 400w, https:\/\/trustrc.com\/wp-content\/uploads\/2021\/02\/Verlingue-UK.png 468w\" sizes=\"(max-width: 1024px) 100vw, (max-width: 640px) 100vw, 300px\" \/><\/a><\/span><\/div><\/div><\/div><\/div><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":764,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[89],"tags":[],"class_list":["post-14217","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>NATCAT in France: Updates - Trust Risk Control<\/title>\n<meta name=\"description\" content=\"Exports now account for more than 40% of GDP. 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