Las aseguradoras afrontan pérdidas a medida que los disturbios en Francia se equiparan ‘a las catástrofes naturales’

French insurers face significant losses as the recent disturbances in the country are compared to natural disasters by analysts. The government is pushing for measures to ensure buildings are insured against damages caused by protests, as these violent incidents have generated the highest losses for insurers since the past weekend.

Morningstar DBRS predicts potential losses of up to €1.2 billion for insurers, while brokers suggest losses could exceed €1 billion. Although the situation in the streets calmed down on Monday night, experts warn that costs could still rise if the disturbances continue. Analyst Marcos Álvarez from Morningstar asserts that these incidents are now "comparable to natural disasters," and warns of an annual loss of hundreds of millions of euros.

The recent weekend's damages were quickly surpassed by those from protests in 2023, which lasted over a week and resulted in over €700 million in insured damages. In France, massive protests began peacefully but turned violent, with at least 3,000 commercial establishments damaged. In 2023, massive protests led to material damages on several occasions, triggering a new system of insurance supported by the state.

Private insurers have tried to limit their exposure to social unrest by introducing exclusions for "strikes, protests, and civil unrest" (SRCC) in their policies, forcing companies to purchase specific insurance for these threats. Others have continued covering these events but set caps on compensation. These exclusions and specific clauses related to SRCC have become more common since the yellow vest protests in 2018.

Lawyers specializing in insurance at Clyde & Co, David Méheut, points out that while there is still a possibility of private insurance for disturbances, "there is a desire to respond to a political issue, which is that there are people without coverage." The frustration over perceived insufficient coverage has led France to approve a new legislation making insurance against disturbances a mandatory component of all property insurance policies.

If the EU approves this law, it will be financed through a fee applied to insurers, which is expected to be passed on to policyholders. However, the system has not yet entered into force and will not retroactively cover this weekend's protests. In addition to insurer contributions, the mandatory disturbance insurance system will have the support of a €4 billion state guarantee from France's Caisse Centrale de Réassurance.