The compensation system for natural catastrophes (“CatNat” in French) enables the indemnification of victims of natural events of abnormal intensity, which are not covered by regular property insurance policies. These include in particular floods, earthquakes and hurricanes, but not fires, storms, hail and snowfall, as these risks are already covered by the regular insurance policies.
In view of climate change and the increasing extreme weather phenomena, the current system reached its limit. The compensation payments in the defined period 1982 to 2022 have reached a total of EUR 50 bn, as opposed to EUR 43.9 bn of collected premiums.
All forecasts suggest that, as a consequence of climate change, claims will increase by around 40 % by 2050 – even 60 %, when considering the development of insured risks (CCR – Caisse Centrale de Réassurance).
La “Caisse Centrale de Réassurance” estimates a possible deficit of “at least EUR 420 mil. per year by 2050“. Therefore, it has become necessary to guarantee the solvability of this system without drastically reducing coverage.
This is the reason why the authorities announced the increase of financial resources as of January 1, 2025. The surcharge rate for the specific financing of the NatCat system, will be increased from currently 12 % to 20 % of the insurance premium for property insurance policies for individuals, companies and agricultural businesses; from currently 6% to 9 % for theft and fire insurance for motor vehicles and from 0.50 % to 0.75 % for glass breakage insurance, in case no further property insurance has been concluded in the motor vehicle insurance contract.
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|
2024 |
2025 |
|
|
Theft fire insurance rate (cannot be combined with the glass breakage rate) |
|
|
Motor vehicles |
6 % |
9 % |
|
|
Glass breakage rate (if no property insurance has been bought) |
|
|
Motor vehicles |
0.50 % |
0.75 % |
|
|
Property insurance guarantees (fire and other risks) |
|
|
Fire and other risks Individuals – Experts – Companies – Buildings – Agricultural businesses |
12 % |
20 % |
The impact of the total insurance premium is therefore not necessarily strictly correlated, as the rate is applied to certain guarantees; however, it may be close.
Example for a property insurance policy with a total value of EUR 40 mil:
|
|
2024 |
2025 |
|
Total annual premium |
EUR 10,000 |
EUR 10,000 |
|
NatCat surcharge |
12% EUR 1,200 |
20% EUR 2,000 |
|
Surcharge for compensation for victims of attacks |
21% EUR 2,100 |
21% EUR 2,100 |
|
Insurance Tax |
8% EUR 1,064 |
8% EUR 1,128 |
|
Total premium incl. taxes |
EUR 14,364 |
EUR 15,228 |
At the same time, it should be noted that the NatCat compensation scheme has recently undergone some major adjustments to facilitate compensation regulations and thus to increase the protection of the insured. An example:
- Consideration of new compensation items (costs for emergency accommodation for main residence, architectural and site management costs, in case they are mandatory).
- Changes with respect to transparency, reporting deadlines and processing periods, with extended deadlines for more compensation and faster payments.
- New deductibles, valid as of January 2025.