For more than thirty years, the SIB (Société d’impression du Boulonnais) developed on the banks of the Liane, a river flowing into the Channel, in Boulogne-sur-Mer (Pas-de-Calais), without knowing major flooding. But, at the end of 2023, this company suffered three major floods. “We didn’t anticipate anything”recognizes Marc Leroy, its general director. The disaster had numerous repercussions, particularly on insurance. “We are no longer insured against flooding in our contract, he indicates. Our insurer agreed to renew a one-year contract with a sharply increased deductible, but if we were flooded again this year, he probably wouldn’t do it for another year…”. Especially since the SIB does not have the means to follow all the recommendations of its insurer.
The issue of climate resilience is shaking up the discussion between manufacturers and their insurers. Between 2020 and 2023, climate losses cost insurers 6 billion euros on average in France, compared to 3.7 billion euros between 2010 and 2019. The association of risk and insurance managers in companies, the ‘Amrae, observe thus “a decline in insurance, with an increase in prices and deductibles, a reduction in sub-limits and an emergence of uninsurability in certain places”, according to its climate representative Michel Josset, even if the market has softened recently. As of January 1, 2025, the rate of contribution dedicated to financing the French public-private natural disaster compensation plan will increase from 12 to 20% for buildings.
“A few years ago, we could trust insurance to pay for reconstruction work after a tornado or flood, but that is no longer the case today and we will be even less able to do it tomorrow. adds Arnaud Bergauzy, member of Amrae and head of risks and insurance at Lafarge France. Adaptation has become very important.” On the insurers’ side, we ensure that customer requests in France are generally answered. But prevention is encouraged more than ever. Insurers see it as a way to remain essential in the eyes of manufacturers. “Prevention is the condition for tomorrow’s insurability. We cannot give everyone a blank check without conditions, warns Simon Blaquière, in charge of reinsurance and the team of experts on natural risks at Generali. In the event of inaction, the cost of insurance will increase but it is entirely possible to moderate the increase.”
SMEs still poorly supported
For SMEs and mid-sized companies, support from insurers remains limited. The insurer Generali France, whose majority of clients have a turnover of less than 300 million euros, is especially in demand after the occurrence of a climatic hazard. Upstream, its action is limited to a website raising awareness of the risks, as well as sending SMS messages in the event of worrying weather forecasts. “Our current challenge is to explore the subject of prevention at the client level, says Simon Blaquière. For example, we would like to be able to tell a company exposed to flooding whether it needs to raise its machinery by 30, 40 or 60 centimeters depending on its location.”
Support for large groups is already more extensive. The latter use data and platforms provided by insurers to anticipate and quantify the impacts of potential climatic hazards on their factories. “Thanks to work carried out with our insurer which made it possible to geolocate climate risks for each of our sites, we then questioned our cement plants on their current level of preparation and what still needs to be done, until 2050 “, illustrates Arnaud Bergauzy at Lafarge. Zurich, Swiss Re, Munich Re, FM Global… Many large insurers have positioned themselves in the niche. Over the past two years, the American insurer FM Global has launched specific tools on the subject, such as climate resilience reports and more prospective studies on future impacts. “Often our customers ask us what to do now. We therefore work a lot with manufacturers to provide products approved against risks, such as hail-resistant solar panels. underlines Malcolm Roberts, CEO of FM Global.
“Moving from data to engineering effort”
Insurers’ concern for natural disasters is not new. “But we are starting to look ahead to 2030 and 2050 to complete our models on these risks,” explains Maxime Ambourg, director of risk prevention consulting at Axa XL for Europe and Asia-Pacific. This insurer has started working on specific adaptation programs with less than ten manufacturers. “It’s about moving from data to engineering effort to optimize a cooling or heating system for example,” he continues. Some risks remain difficult to model. “No one has really taken stock of all the potential impacts of rising ocean levels in particular. All of this is clearly minimized at the moment,” informs Cyril Lelarge, member of Amrae and insurance director of the Sanofi group. Because it is very localized, hail also gives insurers a hard time.
Companies also criticize them for a lack of transparency. “They have information about activities that will potentially be uninsurable in five or ten years. If they do not share them, they create a real strategic problem for the insured. Moving a site or protecting it does not take six months, but five or ten years. regrets Michel Josset. Another complaint from manufacturers: the impact of climate risks in the pricing of a property damage policy today resembles a black box. In a study published at the end of last year, 51% of the 131 risk managers surveyed by Amrae declared themselves dissatisfied with the support provided by insurers in the treatment of climate risks.
Bpifrance accelerates adaptation
At Bpifrance, “adapting to climate risks will enter the daily lives of business managers in the last quarter of 2024”declares Isabelle Albertalli, the climate director of the public bank. In October, Bpifrance integrated a tool dedicated to climate risk into its internal business rating system. “From January 1, all files will include a section on climate risk in addition to elements on financial health”she specifies. Based on a company’s Siren number, the tool developed by Bpifrance displays the current and expected risks over a five-year horizon for each hazard. The possible impacts on turnover are also estimated.
This presentation can be used to open a dialogue with a company on the resilience actions it must take. In the event of insufficient measures taken by a company presenting a significant risk, the public bank has been offering adaptation diagnostics since October. “We hope to do around a hundred per year, even if we have an envelope to do 50 at the moment”indicates Isabelle Albertalli. Are certain companies likely to suffer from this new tool dedicated to climate risk? “Our ambition is rather to support companies towards resilience,” underlines the climate director. But if a company has a significant risk, a very high amount outstanding and it does not want to move on adaptation, we will end up telling it that we cannot finance it.
Source: www.usinenouvelle.com
