Insurance bill 'to double by 2040'

French insurers association predicts extreme weather payouts will reach €92bn in 25 years unless action is taken

INSURANCE payouts following extreme weather events are set to double in the next 25 years, the Association française de l'assurance (AFA) has warned.

Floods, drought and storm damage cost insurers €48bn between 1988 and 2013, the AFA said. The organisation warned the bill is expected to rise to €92bn by 2040 in a white paper published on the opening day of the COP21 climate talks in Paris.

The AFA estimated that 40% of France’s 7,000km of coast is “highly vulnerable” to storms and coastal flooding, which it described as “an emerging risk” following the devastation caused by storm Xynthia in 2010. Over the past 25 years, insurers have paid out about €1.9bn every year to an annual average of 431,000 victims following storms.

The organisation added that the cost of repairs following flooding would more than double from €16bn between 1998 and 2013 to €34bn by 2040, as more new homes were built in flood zones.

Out of 300 towns at risk of marine submersion, only 22% have an approved risk prevention plan, the report said.

“France has good prevention tools but they are poorly or not applied,” AFA president Bernard Spitz said. “Many places in France do not have a risk prevention plan or when these documents do exist, they are not updated and hang on shelves.”

Meanwhile, the cumulative cost of droughts will reach €21bn, the organisation said, mainly to pay for repairs to buildings that develop cracks as the clay soil on which they stand dries out and shrinks.

Among the 34 recommendations in the white paper, the AFA suggests that plans for developments in high-risk areas should be ‘systematically denied’ if they do not include a risk-prevention plan.

It also suggested a national annual awareness day to highlight the dangers of extreme weather and natural hazards.

Photo: Pep.per de Ré / Wikimedia Creative Commons