Download climate risks: impact on natural hazards insurance between now and

Climate change
and insurance study
Executive Summary
CLIMATE RISKS:
IMPACT ON NATURAL
HAZARDS INSURANCE
BETWEEN NOW
AND 2040
SUMMARY
4
Foreword by Jean Jouzel
6
Introduction
7
Study methodology
8
LOOKING BACK
10
PROJECTION
TO 2040
12
PERIL BY PERIL
ANALYSIS
DROUGHT
FLOOD
COASTAL FLOODING
STORM
OVERALL CONCLUSION
FRENCH INSURANCE FEDERATION
CLIMATE RISKS: IMPACT ON
NATURAL HAZARDS INSURANCE
BETWEEN NOW AND 2040
FOREWORD BY JEAN JOUZEL
B
y the end of 2015, the eyes of all those concerned with the
future of our climate were on Le Bourget, where the COP21
Agreement was signed.
Almost all countries on our planet took part in COP21: it is
to be hoped this will be the true starting point for the journey
towards a “low carbon” world, one in which the long-term rise
in temperatures has been controlled and, if possible, limited to
2°C, compared to the pre-industrial period. This is indispensable
if we want today’s young people and future generations to be
able to adapt, at least in all essential ways, to a climate that
will inevitably change. If action is not taken to achieve a rapid
and ambitious reduction in our greenhouse gas emissions, it
will be difficult to deal with the impact of a temperature rise
that could, on average, reach 4°C to 5°C between now and
2100 and keep rising after that. These consequences, which
the Intergovernmental Panel on Climate Change has classified
in five categories, will affect almost all sectors of the economy.
One of those categories concerns extreme climate events:
droughts, heat waves, floods, hurricanes, etc. While the IPCC
remains very cautious in attributing recent changes in these
events to human activity, the diagnosis becomes clearer when
we look at the future. In a warmer world, almost all these extreme
events will become more frequent and/or more intense. This will
be the case, for example, with heat waves and heavy rain over
most continental regions in the mid-latitudes and humid tropics.
While the number of hurricanes is not expected to rise, specialists
predict an increase in the maximum wind speeds and rainfall
associated with these events. These extremes are at the origin
of a significant part of the costs insurers have to meet and it is
therefore important for the industry to establish as accurately as
possible the scale of the risks that will be associated with such
events in the future.
4
That is the aim of this study, Climate Change and Insurance
to 2040 (Changement climatique et assurance à l’horizon 2040),
which draws very heavily on the work of the scientific community
and takes as its starting point the report Climat de la France
au XXIe siècle (France’s Climate in the 21st Century) prepared
by researchers at Météo-France and the Institut Pierre Simon
Laplace (IPSL). It focuses on France and on the period up to
2040, a timescale over which climate change depends little on
greenhouse gas emission scenarios. That is as true for the planet
as a whole as it is for France which, by 2040, will see average
temperatures rise by between 0.6°C and 1.3°C, and perhaps,
in summer, by between 1.5°C to 2°C in the south-east of the
country.
Starting from these projections, the study draws heavily on the
work on extreme events led by my colleague Pascal Yiou at the
Environmental Science and Climate Change Research Institute
(Laboratoire des Sciences du Climat et de l’Environnement), using
an innovative methodology that overlays economic projections
and climate projections. It uses a peril by peril approach (floods,
coastal flooding, drought, wind) and takes uncertainties fully
into account, in particular with regard to the effect of climate
change on storms. It provides valuable insights, supported by
figures, and underlines the fact that, over the next 25 years,
these hazards – which will be less and less natural – will have a
cost.
This study highlights the importance of adapting prevention
policies, starting now, and of developing a risk awareness culture
in our country; it represents a significant contribution by the
insurance industry to raising the awareness of actors in the
run-up to COP21.
JEAN JOUZEL
(Director of Research at the French Nuclear Energy Commission),
(Vice-chairman of the IPCC from 2002 to 2015).
5
INTRODUCTION
T
he increasing frequency and intensity of natural hazards
is often cited as an early indicator of climate change.
Insurers, using past figures for insurance payments for
damage caused by natural hazards having occurred in
metropolitan France, have attempted, with the study Climate Change and Insurance (Changement climatique et
assurance), to reply to the following question:
IS IT POSSIBLE TO PUT A FIGURE
ON THE IMPACT OF CLIMATE CHANGE
ON INSURANCE BETWEEN NOW AND 2040?
A remark should be made about the time horizon used
for this study. Twenty-six years is a short period in climate
terms. Nevertheless, this horizon was chosen because putting a figure on the impact requires climate projections to
be considered together with projections of social and economic assets and activities at risk. In terms of these latter
projections, 26 years is a long time and indeed represents
the limit for a credible projection. The period chosen is therefore a compromise.
REMARKS
The geographical
scope of this study is
limited to the territory
of metropolitan France.
The overseas territories
and départements are
exposed to specific
hazards which must be
analysed using other
models than those used
in this study.
6
In addition, this study
focuses on the direct
damage caused to
property by natural
hazards, including
operating losses. It does
not include bodily injury
and the damage caused
to farm crops that have
not been harvested and
placed in store.
The time reference
period of the study is
from 1988 to 2013 (for
the “Looking Back”
section) and from
2014 to 2039 (for the
“Projection” section).
STUDY METHODOLOGY
The study was based on a projection of the socio-economic data (housing and other assets
and activities exposed to natural hazards) on the one hand and a climate projection on the
other.
For the socio-economic projections, the
method consists of developing a scenario
of the growth in wealth and its exposure
in the next 26 years in France. For most of
the criteria (number and size of dwellings,
number and size of businesses, growth in
geographical concentration) the most up-todate projections of the French National
Institute of Statistics and Economic Research
(INSEE) were used. They were supplemented
by specific data on hazard areas collected
by the Natural Risks Mission (MRN – Mission
Risques Naturels)1.
For the climate projections, the study
called on the services of the climate and
environmental science laboratory Laboratoire
des Sciences du Climat et de l’Environnement
(LSCE). The laboratory provided the data
from two of its climate models covering the
period 1970-2100, both based on scenario
RCP8.5 of the Intergovernmental Panel on
Climate Change (IPCC).
The two climate models used were a global
model of the Institut Pierre Simon Laplace
(hereinafter IPSL) and a regional model
of météo France (hereinafter MF). The
results of these two models were taken as
1
the extremes of a range, with the study
presenting the average of that range, except
where stated otherwise.
An array of climate indicators provided by
these models was analysed over the last
25 years to test their relevance in terms of
correlation with the annual amounts paid out
by insurers.
Based on their observed relevance, four
indicators were used as references in the
study’s future climate projections. These
were:
MAXIMUM
DAILY WIND SPEED
MAXIMUM
DAILY RAINFALL
CUMULATIVE
DAILY RAINFALL
DAILY TEMPERATURE
(MEAN, MIN, MAX)
MRN : Association created by the French Insurance Federation tasked with providing better assessment and prevention of natural hazards.
7
LOOKING BACK
The history of insurance payments made following the occurrence of natural hazards is summarised in the following graph:
2010
In millions of current Euros
FLOOD
STORM
VAR + XYNTHIA
2003
DROUGHT
1 360 M€
RHÔNE
670 M€
4 500
2010
1999
4 000
1990
355 M€
3 000
1990
DROUGHT
1 420 M€
6 860 M€
DROUGHT
3 500
XYNTHIA
2003
LOTHAR &
MARTIN
735 M€
2009
KLAUS &
QUINTEN
1 880 M€
2011
DROUGHT
800 M€
DARIA
2014
HAIL
1 315 M€
850 M€
2 500
2002
GARD
2 000
1 500
700 M€
1992
VAISON LA
ROMAINE
1988
NÎMES
240 M€
288 M€
1 000
500
0
88
89 90 91
92 93 94 95 96 97
The breakdown of the total
amount paid out by insurers
over the last 25 years (1988
– 2013) by type of peril is as
follows:
50 % 34%
STORM,
HAIL AND
SNOW
FLOOD
98 99 00 01
02 03 04 05 06 07 08 09 10
From 1988 to 2013
FLOOD
Private individuals
Business / professional
Private individuals
DROUGHT
Business / professional
DROUGHT
All perils
8
12
13
14
The detailed breakdown of these figures, by amount and
number of claims by category of insured parties (private
individuals and business/professional) is shown in the
table below:
STORM (SHS)
16%
11
Number of
claims paid
Amount paid out
(billions of constant
Euros 2013)
1 463 000
1 149 000
314 000
9 147 000
7 342 000
1 805 000
598 000
16,6
8,2
8,4
24,1
13,3
10,8
7,6
11 208 000
48,3
1988 – 2013
1991 was the year that saw the lowest level of payouts, at
760 million euros, while 1999 saw the highest level, at 13.1
billion constant 2013 Euros.
1991
1999
€
431 000
0,76
Billions of
Euros
€
claims paid
per year
13,1
Billions of
Euros
€
1,86
Billions of
Euros/year
The average amount paid per claim was 4,310 Euros. The
breakdown of the average cost per claim by type of peril
and category of insured party (private individuals and
business/professional) is shown in the table below:
AVERAGE COMPENSATION PAID
PER CLAIM (1988-2013)
During the last 25 years,
insurers have paid out on
an average of 431,000 property damage claims each
year, amounting to 1.86
billion Euros, for property
damage.
Private
individuals
Business /
professional
Total
FLOOD
7 220 €
26 700 €
11 400 €
STORM
1 810 €
6 070 €
2 600 €
DROUGHT
12 700 €
NS*
12 700 €
Average
all perils
3 200 €
9 070 €
4 310 €
* Until now drought claims (shrinkage-expansion of clay) have only concerned
private individuals
9
PROJECTION
TO 2040
Is it possible to put a figure on
the impact of climate change on
insurance between now and 2040?
In order to answer this question, the first stage
of the study was to produce a socio-demographic projection for the period 2014-2039 and
link it to a climate projection, making it possible
to project the amounts that insurers will pay
out between now and 2040.
place, at an interval of 20 years, will increase
in proportion to the rate of growth of wealth.
This wealth factor includes the “number of
establishments” factor (greater concentration
of housing or businesses) and the “magnification” factor (each unit is more expensive).
The results were analysed to identify the
impact of different factors in order to isolate
the part that can be strictly attributed to climate change. This was done for each individual
peril, identifying the impact on businesses and
professionals (traders, artisans, businesses,
local authorities, farms) on the one hand and
the impact on private individuals (essentially
housing) on the other.
The different factors that can explain the difference between the facts observed over the
last 25 years and the projections to 2040 are
of two types:
Distribution
Independently of the overall rate at which
the country’s wealth grows, the geographical distribution of that growing wealth has
consequences for the overall vulnerability to
natural hazards.
Clearly, a département having an overall vulnerability to floods that is twice the national
average and experiencing twice the national
average rate of growth of wealth creates a
multiplier effect with regard to overall vulnerability.
The same multiplier effect will also be seen
if, within that département, the increases in
wealth are concentrated, for example, along
river banks.
SOCIO-EONOMIC FACTORS
Wealth
Increasing wealth produces greater concentrations of businesses and housing. Regional and
local authorities have more infrastructure. The
consequences of a natural event of exactly the
same intensity, occurring in exactly the same
10
The diagrams below illustrate this phenomenon. They show the growth of an urban area
between 1999 and 2008. This area of the
municipality has been entirely built in an area
prone to flooding, shown in blue.
CLIMATE FACTORS
1999
FLOODED AREA
2008
AREA FLOODED IN 1999
PROPERTIES FLOODED IN 1999
NEW PROPERTIES BUILT SINCE 1999
Thus, an overall growth in wealth of 10% can
increase the vulnerability of a municipality
by 50% or 75% if that growth takes place in
a vulnerable area.
We call this phenomenon the “distribution”
factor.
This “distribution” factor can be further broken down into the “migration” factor, which
concerns migrations of wealth from a less
vulnerable to a more vulnerable département,
and the “hazard area” factor, which takes
account, at a more local level, of developments in risk areas (flood-prone areas as in
the previous example or areas of clay soil for
drought risk).
Climate change
This factor manifests itself in a change in the
frequency of occurrence and intensity of natural events in the country. The study analysed
projections of extreme events and those of
more common events, referred to as “background noise”, separately. For extreme events
we considered changes in the return period2,
while for more common events we considered
frequency of occurrence. This factor is strictly
linked to climate change.
Natural climate hazard
Over the last 25 years, France has experienced
significant natural events with a return period
in excess of 25 years.
On the other hand, there are events of this
type which we have not experienced in the
last 25 years but which could very well occur
in the next 25 (major flooding of the Seine or
the Loire, for example).
The study therefore assigned a probability of
occurrence to these events in the projections
in order to obtain a better estimate, in actuarial
terms, of future insurance payments.
This “climate hazard” effect was treated as
being separate from climate change because
it reflects the natural variability of the climate
as it has always existed.
COASTAL FLOODING
Coastal flooding is a peril that is not taken
into account by the climate models used in
the study. While this may be an effect linked
to climate change, its origin lies in the rise in
sea levels, which itself lies outside the regional climate indicators used in the study. In
particular, the risk of coastal flooding associated with storms is excluded from the study.
Consequently, this peril is dealt with in a separate chapter in the study, as it requires a different methodology to the flood, storm and
drought risks.
2
Return period of a natural event: statistical time between two occurrences of a natural event of a given intensity. This period represents a probability, not a forecast. Thus, if the return period of a natural event of a given intensity is determined as being 10 years, that does not mean that it will
recur every 10 years, but that it has a 10% probability of occurring each year.
11
PERIL BY PERIL
ANALYSIS
DROUGHT
PAGE 13
FLOOD
PAGE 16
COASTAL FLOODING
PAGE 20
STORM
PAGE 24
12
DROUGHT
DROUGHT
THE DROUGHT PERIL CONCERNS THE PHENOMENON OF SUBSIDENCE, I.E.
THE EFFECT OF DAMAGE CAUSED TO BUILDINGS (ALMOST EXCLUSIVELY
INDIVIDUAL HOUSES) OWING TO SHRINKAGE AND THEN EXPANSION OF
SUBSOILS ASSOCIATED INITIALLY WITH INSUFFICIENT RAINFALL.
This phenomenon occurs mainly on clayey
subsoils, which are particularly vulnerable to
subsidence. Such subsidence occurs mostly
in some thirty départements of France (cf 1).
CLAYEY SUBSOILS
1
SOCIO-ECONOMIC FACTORS
INVOLVING CHANGES IN
ASSETS AT RISK
BETWEEN NOW AND 2040
The analysis of the projection over the next
26 years of assets at risk (private housing at
risk of subsidence) can be summarised in map
2 below:
Départements such as Morbihan or Cantal
show a high growth of assets at risk even
though they are not included in the list of
départements at risk because of clayey subsoils. This is because, although they are not
on that list, they do contain localised areas of
clayey subsoils that coincide with areas where
the forecast growth of such assets is very high.
In total, ten départements have projected
growth rates of more than 10% for assets vulnerable to drought peril in the period to 2040.
SOIL TYPE
CLAYEY SOILS
NON-CLAYEY SOILS
AVERAGE ANNUAL CHANGE
2
< 1%
> +5%
13
DROUGHT
CLIMATE
FACTORS
The two climate indicators used to project
the drought peril over the next 26 years were
levels of rainfall (cumulative and maximum
daily rainfall) and temperatures (mean, maximum and minimum), which were studied in the
framework of the two models: IPSL and MF1.
The correlations obtained between these
variables and drought events giving rise to
insurance payments for losses give the following frequency changes between now and
2040 (3 & 4) :
In the Météo-France model 3, the annual
average change is above 3% in Brittany and
above 2% on the north-west coast and in the
Pyrenees. The change is clearly lower in the
north-east region (blower than +1.5 % a year).
For the IPSL model 4, the highest changes
are in the south-west, extending to Brittany,
and also include the Mediterranean region. This
model too shows the north-east experiencing
lower increases. For extreme events, the reference provided by the 2003 drought allows
us to observe a temperature higher than the
90th quantile associated with levels of rainfall
below the median.
On this basis, according to the models we can
estimate changes in the return periods for such
an event as follows:
CHANGE APPLIED
TO EXTREME EVENTS
Average change
MF model
IPSL model
Annual average change
+ 5,6 %
+ 4,3 %
Change over 13 years
+ 103 %
+ 73 %
Past return period
Future return period
20 years
10 years
12 years
ANNUAL AVERAGE CHANGE APPLIED TO
THE FREQUENCY OF BACKGROUND
NOISE FOR EACH DÉPARTEMENT
3 MF Model
< 0%
4 IPSL Model
> +3%
< 0%
Indicators
used: rainfall
levels lower
than the
median and
temperatures
higher than the
3rd quantile
> +3%
The results of the IPSL (Institut Pierre Simon Laplace) and CNRM (Centre National de Recherches Météorologiques) simulation are referred to as
IPSL and those of the WRF (Weather Research & Forecasting Model) and Météo France simulation are referred to as MF.
1
14
DROUGHT
CONCLUSION
CONCERNING THE PROJECTED IMPACT OF THE DROUGHT PERIL
AND ITS DIFFERENT CONTRIBUTING FACTORS BETWEEN NOW AND 2040
COST BASED ON
LAST 25 YEARS
DISTRIBUTION
NATURAL
CLIMATE
WEALTH
VARIABILITY
CLIMATE
CHANGE
Billions of Euros
8
3
1 1
€
8
21
Billions
of Euros
2014-2039
The study concludes there will be a
STRONG UPWARD TREND
in the drought peril with regard to
DAMAGE FOR WHICH
INSURERS PAY COMPENSATION
1988-2013
8
Billions
of Euros
For example,
THE RETURN PERIOD
for a drought on the scale of the drought
we experienced in 2003 would change
FROM 20 YEARS TO 11 YEARS
The share of this change accounted for by
“CLIMATE CHANGE”
€
€
21
2014-2039
Billions
of Euros
Our model finds there will be a
CUMULATIVE COST
of 21 billion Euros
and that, between now and 2040, the
ANNUAL AVERAGE
COST OBSERVED
TODAY WILL ALMOST
TRIPLE
is significant,
accounting for 60%,
I.E. 8 BILLION EUROS
15
FLOOD
FLOOD
EXCLUDING COASTAL FLOODING
THIS SECTION DEALS ONLY WITH THE CONSEQUENCES OF FLOODS CAUSED
BY WATER COURSES OVERFLOWING, EXCLUDING COASTAL FLOODING. AS
INDICATED AT THE BEGINNING OF THE STUDY, THE QUESTION OF COASTAL
FLOODING IS CLOSELY ASSOCIATED WITH THE RISE IN SEA LEVELS, WHICH
IS NOT INCLUDED IN THE CLIMATE INDICATORS USED IN OUR MODEL. THE
ISSUE OF COASTAL FLOODING WILL THEREFORE BE DEALT WITH IN THE
FOLLOWING CHAPTER.
SOCIO-ECONOMIC FACTORS
INVOLVING CHANGES IN HOUSING AND
OTHER ASSETS AND ACTIVITIES AT RISK
BETWEEN NOW AND 2040
According to the INSEE’s latest research, the current projections of the number of homes and
businesses over the next 26 years and their distribution across the country are as follows:
ANNUAL AVERAGE CHANGE IN NUMBER
ANNUAL AVERAGE CHANGE
OF ESTABLISHMENTS OF BUSINESSES
IN NUMBER OF HOMES
AND PROFESSIONALS
OF PRIVATE INDIVIDUALS
1
2
< -0,3%
16
> +0,1%
< 0%
> +2,0%
FLOOD
The changes used for flood hazard areas were
those observed over the period 1999-2006
and were as follows 3:
Estimates of the growth in wealth and its
distribution across the country over the next
26 years show:
An increase in the proportion of housing in
flood-prone areas means the increase in housing in hazard areas is higher than the overall
increase in housing.
For housing: an increase in number of + 1.1%
a year and in size of 0.4% a year with higher
rates in a crescent extending from the départements of Brittany to the northern part of the
French Alps, passing through a wide band of
the south of France.
For businesses: an increase in number of
+ 0.1 % a year and in value of 1.7% a year. Apart
from the Île-de-France, the regions with higher
growth are in the south and all along the Alps.
Particularly high “hyper-growth” in hazard
areas is observed on the Atlantic coast, in the
Île-de-France and on the Mediterranean coast.
CHANGE IN PROPORTION OF HOUSING
IN HAZARD AREAS
3
< -0,3%
> +0%
17
FLOOD
CLIMATE
FACTORS
MAJOR
EVENTS
The two climate indicators of the IPSL and MF
models that were used because of their past
relevance were:
Maximum daily rainfall by département.
Cumulative daily rainfall by département.
For extreme events, the 99% quantile of the
cumulative amount of rainfall was used for
the two models. This allowed the following
changes in return periods to be established
for major events:
The climate indicator that correlates best with
amounts paid out by insurers in the past is
the 90% quantile of the cumulative amount of
rainfall of the two models used.
This led us to apply the following annual
changes to the underlying frequency of floods
over the next 26 years:
CHANGE APPLIED TO
EXTREME EVENTS
Average change
Annual average change
Change over 13 years
Past return period
Future return period
Past return period
Future return period
Past return period
Future return period
90% QUANTILES
4 MF model
< 0%
18
> +0,5%
5 IPSL model
< 0%
> +0,5%
MF model
IPSL model
+ 0,7 %
+ 0,7 %
9,3 %
9,5 %
50 years
46 years
46 years
75 years
68 years
68 years
100 years
91 years
91 years
FLOOD
CONCLUSION
CONCERNING THE PROJECTED IMPACT OF THE FLOOD PERIL, EXCLUDING COASTAL
FLOODING, AND ITS DIFFERENT CONTRIBUTING FACTORS BETWEEN NOW AND 2040
COST BASED ON
LAST 25 YEARS
DISTRIBUTION
WEALTH
CLIMATE
NATURAL
CHANGE
CLIMATE
VARIABILITY
Billions of Euros
16
8
5
4
1
€
34
Billions
of Euros
2014-2039
We note that, unlike in the case of drought, the
“CLIMATE CHANGE” FACTOR
ACCOUNTS FOR LITTLE OF
this change (1 billion Euros i.e. 6 %
of the difference between the two periods).
1988-2013
16
Billions
of Euros
The models show in particular that
THE RETURN PERIODS
FOR MAJOR FLOODS
WILL REMAIN ALMOST
UNCHANGED
Apart from the “wealth” factor THE COST ASSOCIATED WITH
THE “DISTRIBUTION OF THAT
WEALTH” IS SIGNIFICANT:
5 billion Euros. This cost underlines the fact
that, if there is no change, the geographical
distribution of growth will increase the
overall vulnerability to flooding.
€
€
34
2014-2039
Billions
of Euros
The study concludes that
there will be an
UPWARD TREND IN
THE FLOOD PERIL
(excluding coastal flooding)
leading to insurers paying out
a total of 34 billion Euros,
compared to the 16 billion Euros
paid between 1988 and 2013
I.E. + 104 %
19
COASTAL FLOODING
COASTAL
FLOODING
COASTAL FLOODING IS AN EMERGING PERIL FOR FRANCE. THE RECENT
TRAGIC CONSEQUENCES OF THE COASTAL FLOODING ASSOCIATED WITH
STORM “XYNTHIA” REMAIN FRESH IN OUR MEMORIES. IS THIS TYPE OF EVENT
LIKELY TO BE REPEATED BETWEEN NOW AND 2040?
METHODOLOGY
USED
The methodology used by the study to evaluate the amounts that insurers might be required to pay out in connection with coastal
flooding was completely different from the
methodology used for the other perils.
Coastal flooding is the result of a conjunction
of a large number of natural factors: winds,
rain, swell, tide, sea level, coastal topography,
etc. These factors lie well outside the models
described above.
Consequently, this study used the following
to make projections about this peril:
The past frequency of coastal floods 1
Contrary to what one might believe, our
country has suffered events of this type in the
past: 84 over the last 30 years to be precise.
With the exception of Xynthia, most had no
major consequences.
The mapping of Approximate Envelopes of
Potential Flooding (Enveloppes Approchées
20
des Inondations Potentielles) associated with
coastal flooding drawn up by the Environment Ministry 2
On the basis of an accurate analysis of the
topography, the Ministry of Ecology, Sustainable Development and Energy has mapped
maximum flood extents taking account of a
sea level rise of 1 metre by 2100. This envelope,
constructed to evaluate exposure of housing
and other assets and activities to flood risk in
the same way across the whole country, must
not be confused with the mapping of floodprone areas under the Risk Prevention Plans
(Plans de Prévention des Risques) and Flood
Area Atlases (Atlas de Zones Inondables) or of
Areas at Significant Risk of Coastal Flooding
(Territoires à Risque Important d’inondation
littoraux).
Finally, analysis of the housing and other
assets and activities at risk in the hazard
zones thus defined, as well as their changes
over time.
COASTAL FLOODING
HISTORY OF COASTAL FLOODING
OVER THE LAST 30 YEARS
CLIFFED COAST
BY GEOGRAPHICAL SECTOR
ROCKY COAST
1
LOW SANDY COAST
Number of coastal flooding events
during the last 30 years
by geo-sedimentary area
12
DUNES
SALT MARSHES
(Source MRN events database)
CLIFFED COAST
ROCKY COAST
LOW SANDY COAST
13
DUNES
SALT MARSHES
12
14
24
9
24
COASTAL FLOODING HAZARD
HYPOTHESIS FOR ESTIMATION OF
EXPOSURE OF HOUSING AND
OTHER ASSETS AND ACTIVITIES
2
(Source Ministry of Ecology,
Sustainable Development
and Energy)
This is an
approximate and
maximum envelope
developed on the
basis of prospective
methodology.
ÎLE DE RÉ
ÎLE D’OLÉRON
LA ROCHELLE
ROCHEFORT
21
COASTAL FLOODING
On the basis of these data we transposed the
impact of future events lineally in time, defining
their occurrence on the basis of frequencies
observed in the past. We estimated that these
flood extents could be associated with events
with a return period of between 500 and 1,000
years.
Within this temporal “linearity”, we took a
snapshot of the situation in 2040, the horizon
of our study.
Finally, we assumed that the future growth
of housing and other assets and activities in
hazard areas would be similar to that observed
in the past.
RESULTS
The estimate obtained in this way shows an
additional cost of between 3.2 and 4.2 billion
Euros over 26 years. This compares to a cost
of coastal flooding for insurers of 1 billion Euros
(including 800 million Euros for Xynthia) over
the last 25 years.
It should be noted that this cost relates only
to coastal flooding in the true sense of the
term. Rising sea levels also raise the question
of coastline management (progressive erosion
making it necessary in certain parts of France
to move housing or activities). That management also has a cost (which will certainly be
very high) which falls under public prevention
policies, but which is not included in this study.
Consequently, the flood risk including coastal
flooding is estimated as follows: (see conclusion on the next page).
22
COASTAL FLOODING
CONCLUSION
CONCERNING THE PROJECTED IMPACT OF THE FLOODING AND COASTAL FLOODING
PERIL AND ITS DIFFERENT CONTRIBUTING FACTORS BETWEEN NOW AND 2040
COST BASED ON
LAST 25 YEARS
DISTRIBUTION
WEALTH
NATURAL
CLIMATE
VARIABILITY
CLIMATE
CHANGE
38
Billions of Euros
16
8
5
4
1
4
€
Billions
of Euros
2014-2039
FLOODING COASTAL
FLOODING
€
COASTAL FLOODING
on its own accounts for
18% OF THE ADDITIONAL COST
OF FLOODS
As the emergence of this peril
is associated with climate change,
we can put the total
COST OF CLIMATE CHANGE
IN RESPECT OF THE FLOOD
PERIL AT 5 BILLION EUROS
I.E. 1/4 OF THE INCREASE
€
34 + 4
Billions
of Euros
Billions
of Euros
INCLUDING COASTAL
FLOODING IN FLOOD
RISK INCREASES BY
4 BILLION EUROS
THE PROJECTED
ADDITIONAL COSTS
of the flood peril.
23
STORM
STORM
OVER THE LAST 25 YEARS, STORMS HAVE BEEN THE MOST EXPENSIVE PERIL
FOR INSURERS. WHEN THEY OCCUR, THEY AFFECT A LARGE PART OF THE
COUNTRY AND LEAD TO A VERY LARGE NUMBER OF CLAIMS.
SPECIFIC DIFFICULTIES
POSED BY THE STORM PERIL
The storm peril, from a strictly climate-related
point of view, poses a dual problem:
Firstly, in the analysis of past events, the
most relevant climate indicator provided by the
models used (highest wind speeds recorded
for 10 minutes) has the weakest correlation of
all the perils analysed with the amounts paid
by insurers. No clear correlation was observed
between this indicator and the frequency of
storms experienced over the last 25 years.
Secondly, the projection of exceptional
events (which account for most of the damage
for which insurers pay out) gives very different
results depending on whether the IPSL or the
MF model is used.
Using the 99% quantile gives the following
annual average changes depending on the
model:
99% QUANTILES
1 IPSL model
< 0%
24
> +0,5%
2 MF model
< 0%
> +0,5%
STORM
This is too uncertain a basis for a credible climate projection over the next 26 years.
This accords with the observations of many
climatologists concerning the uncertainties in
measuring the impact of climate change on
wind. Thus, Jean Jouzel states in his August
2014 study Climat de la France au XXIe siècle
(France’s Climate in the 21st Century):
//
The conclusions presented in this
section are based on a study of
a maximum winter wind index
excluding gusts. As they relate only
to the two Aladin-Climat and WRF
models, they are not accompanied
by considerations of multi-model
uncertainty. Over the period 19762005, the strongest winter winds
occurred near the Channel coasts and
Brittany, along part of the Atlantic
coast, and near the Mediterranean
coasts. Initial estimates show that,
according to the Aladin-Climat
model, the intensity of the strongest
winds could reduce in the late 21st
century over the whole of the country,
whatever the RCP scenario. While
the WRF model also seems to show
a reduction in strong winter winds in
the south of the country, it simulates
an overall increase in strong winds in
the north of the country. This initial
analysis therefore gives an indication
about the strongest average winds,
with different results for the north
of the country depending on the
model. However, it does not permit
conclusions to be drawn concerning
the frequency and intensity of winter
storms, which will require a specific
study.
FACTORS USED
IN THE STUDY ON THE BASIS
OF THESE UNCERTAINTIES
Given these inconsistencies and uncertainties,
the study took the following approach to projecting the storm peril:
Neutralising the “climate change” factor. In simple terms, the study starts from
the principle that, given the current state of
knowledge, it should be assumed that climate
change will not lead to either a decrease or an
increase in storms in France between now and
2040.
Taking account of the exceptional nature of
the Lothar and Martin storms in 1999. Given
the particularly long return periods for these 2
events (70 years for each event) and the proportion of past costs they accounted for (13.4
billion Euros), they were “probabilised” in the
future projection, which therefore includes a
negative “climate hazard” factor of 1.3 billion
Euros.
The hazard areas used to project the housing and other assets and activities at risk
(“wealth” and “distribution” factors) were kept
the same as for the last 25 years.
//
25
STORM
CONCLUSION
CONCERNING THE PROJECTED IMPACT OF THE STORM PERIL,
AND ITS DIFFERENT CONTRIBUTING FACTORS BETWEEN NOW AND 2040
NATURAL
CLIMATE
VARIABILITY
COST BASED ON
LAST 25 YEARS
DISTRIBUTION
WEALTH
Billions of Euros
-1
24
8
2
€
33
Billions
of Euros
2014-2039
The exceptional nature of the storms
LOTHAR ET MARTIN
in 1999 means it is necessary to include
A NEGATIVE “CLIMATE
HAZARD” FACTOR
of 1 billion Euros over the next 25 years.
On this basis, the study concludes there will be
WEAK GROWTH IN DAMAGE
CAUSED BY STORMS
COMPARED TO THE PERIOD
1988-2013
(a cumulative amount of 9 billion Euros,
i.e. + 39 % over 26 years).
However, this projection was produced by a
cautious methodology in view of the
HIGH LEVEL OF SCIENTIFIC
UNCERTAINTY SURROUNDING
THE EFFECTS OF CLIMATE
CHANGE ON THIS PERIL
26
Wind is the peril
for which climate models give
the most conflicting results
concerning future changes
in our country.
In view of this,
the study took the approach of
“NEUTRALISING” THE
“CLIMATE CHANGE”
FACTOR IN ITS
PROJECTION FOR
STORMS BETWEEN
NOW AND 2040
ENSEMBLE DES PÉRILS
OVERALL
CONCLUSION
Bringing together all the perils studied, the projections provided by the study concerning the quantified
consequences of natural hazards for insurers between
now and 2040 give the following results:
27
ENSEMBLE DES PÉRILS
CONCLUSION CONCERNING THE PROJECTED
COST BASED ON
LAST 25 YEARS
WEALTH
Billions of Euros
48
19
2014-2039
€
THE SECOND MOST SIGNIFICANT FACTOR IS
DIRECTLY LINKED TO CLIMATE CHANGE
and accounts for 30% of the projected increase. It is estimated that
climate change will cost 13 billion Euros between now and 2040.
THE TOTAL INCREASE
IN WEALTH
OF OUR COUNTRY
ESTIMATED AT 19
BILLION EUROS
(density and average value of
housing, businesses and assets of
regional and local authorities)
ACCOUNTS FOR 43 %
OF THIS INCREASE
and is the leading
contributory factor.
28
IT IS EXPECTED TO MAINFEST ITSELF MAINLY
THROUGH THE DROUGHT PERIL
with the amount of additional damage estimated at 8 billion Euros.
COASTAL FLOODING IS SECOND IN THE
LIST OF PERILS THROUGH WHICH CLIMATE
CHANGE WILL MANIFEST ITSELF
with a risk of significant increases in the amounts paid out by
insurers in the medium term.
The projections produced estimate that the damage caused by
this peril in the next 25 years will be 4 billion Euros, compared to 1
billion Euros in the last 25 years (mainly Xynthia).
This peril presents the strongest growth dynamic and, all things
being equal, will become very significant beyond the 26 year
period considered in this study.
ENSEMBLE DES PÉRILS
IMPACT OF ALL PERILS BETWEEN NOW AND 2040
DISTRIBUTION
8
NATURAL
CLIMATE
VARIABILITY
4
CLIMATE
CHANGE
13
€
92
Billions
of Euros
1988-2013
48
Billions
of Euros
€
€
92
2014-2039
Billions
of Euros
The study projects that
THE CUMULATIVE AMOUNT
OF DAMAGE CAUSED BY
NATURAL HAZARDS WILL
BE 92 BILLION EUROS
between now and 2040.
UNFAVOURABLE SPATIAL PLANNING
is the third most significant contributory factor to the
projected future increase, accounting for 18% of the
projected increase.
It is estimated that it will cost 8 billion Euros between now
and 2040, 60% of which relates to flood peril.
There is currently no scientific
consensus concerning
THE IMPACT OF CLIMATE
CHANGE ON WIND.
The study therefore neutralised this impact. While it may
also lead to additional costs in the next few decades, it is not
possible to put a figure on those costs.
i.e. an
INCREASE OF
44 BILLION EUROS
in constant Euros.
CLIMATE CHANGE
IS THE SECOND
MOST IMPORTANT
CONTRIBUTORY
FACTOR IN THIS
INCREASE,
ACCOUNTING FOR
13 BILLION EUROS
BETWEEN NOW
AND 2040.
29
30
31
32
33
34
Décembre 2016 / Conception graphique : Vanessa Vansteelandt / Crédits illustrations : Shutterstock
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