Riots cost insurers billions in France

The recent riots in France could cost insurers up to 1.2 billion euros, according to analysts from Morningstar DBRS, as cited by the Financial Times. This estimate is higher than the 798 million euros paid out in 2023 after the death of Nahel, as reported by France Assureurs.

Violence concentrated over two days

The violence occurred mainly on October 17 and 18, with analysts noting that the damage could be 50% higher than the 2023 riots, despite the shorter duration. The intensity and geographic spread of the unrest contributed to the increased costs.

Businesses damaged nationwide

At least 3,000 businesses have been damaged across France, according to an initial assessment by the Minister of Commerce, Serge Papin. Inflation has also raised the cost of repairs and replacements, increasing the amount insurers must pay out.

Riots becoming like natural disasters

Marcos Alvarez of Morningstar DBRS said the riots are becoming "like natural disasters" in France, with potential annual damages reaching hundreds of millions of euros. This trend may force insurers to reconsider how they cover such risks.

Insurance limits and government response

Thomas Buberl, CEO of Axa, warned that repeated violent events could push insurers beyond their financial limits. He called for the government to take internal security seriously and emphasized that insurers must be financially capable of covering long-term risks.

Government plans for mandatory riot insurance

The French government is preparing a reform to make riot insurance mandatory in property damage contracts. The reform would use a mutualization mechanism to spread costs and include a state guarantee of up to 4 billion euros through the Central Reinsurance Fund (CCR). The reform still needs approval from the European Commission and will not cover recent damages.