Every year, recurrent drought represents a major cost in terms of building repairs. The compensation system for natural disasters, which is based on a public-private partnership, is under heavy pressure. Concern is growing.
Drought damage to homes
Each year, periods of drought cost insurers between 700 and 900 million euros. While farmers are the first to suffer the consequences, private individuals are not spared. Indeed, drought causes clay soils to shrink, swelling again with winter rains.
This phenomenon, known as "clay shrinkage and swelling", causes cracks and weakens homes, even leading to their collapse. It affects many buildings, particularly single-family homes, many of which were built on clay soils.
However, heatwaves and droughts are becoming increasingly frequent, and are set to intensify over the coming years, which could sharply increase the cost of damage linked to natural disasters.
A phenomenon that undermines the compensation system for natural disasters
Compensation for natural disasters is currently based on a public-private system set up in 1982. In practice, insurers are responsible for compensating victims, in strict compliance with government regulations governing procedures.
Between 1982 and 2019, droughts cost 14 billion euros, or 36% of the damage covered by the natural disaster compensation scheme (excluding vehicle damage).
However, as drought episodes multiply and intensify, this figure could rise by 23% by 2050, according to estimates by the Caisse Centrale de Réassurance (CCR), which is in charge of the CatNat natural disaster compensation scheme.
In 2018, during a visit to Saint-Martin a year after Hurricane Irma, Emmanuel Macron promised to reform the scheme to make it "faster, more generous, but also more incentive-based", he said at the time.
Currently financed by a surcharge on non-life insurance policies, this scheme could be jeopardized by climate change and the increasing number of natural disasters. However, 2 years on, the reform that insurers were hoping for has yet to materialize.