Natural disasters, a heavy toll for insurers by 2040

In the framework of the COP 21 held from 30 November to 11 December 2015 in Paris, the French Insurance association (Afa) estimated the cost of natural disasters in France to 92 billion EUR (97 billion USD) by 2040, nearly double the bill of the past 25 years.

Global warming and the enrichment of the hexagon are partly responsible for the increase of economic damages and particularly those attributable to insurers. In 2040, the cost of drought could rise from 8 to 21 billion EUR (8.46 to 22 billion USD) while the flooding cost (stemming from rivers) would increase from 16 to 34 billion EUR (17 to 36 billion USD).

To cope with this critical situation, the Afa calls for the implementation of certain reforms for the enforcement and modernization of the existing policies. The association also proposes to introduce new measures in an effort to better adapt France to the climate change consequences.

On the Afa's initiative, twenty six European and international federations of insurers and reinsurers met on the sidelines of the COP 21 to consider the possibility of a common agreement aimed at limiting global warming to 2°C by the end of the century.