towards an increase in insurance rates in 2025?

In Monaco, every year at the same time, it is the grand mass of the insurance sector. Until Wednesday, September 11, a hundred groups from all over the world are gathered in the principality. They discuss a side of the profession that is little known to the general public: the rates and conditions under which “reinsurers” will insure “insurers”. For an insurer to be able to compensate us for the damage we suffer, it must itself be insured in advance. Hence the profession of reinsurer.

Every year, disasters and climate disruptions multiply. The Aspe Valley in the Pyrénées-Atlantiques, where bad weather caused mudslides devastating villages and collapsed roads on Saturday, September 7, is another example. Globally, for the first half of 2024, natural disasters have caused 110 billion euros in economic losses in damage and impact on activity. Half of this has been compensated by insurers, the rest is covered by states, with public money.

The cost of these climatic hazards is constantly increasing. What will be the direct impact on insurance premiums? This is what is currently being decided in Monaco. After an overall 5% increase in insurance rates in 2024, the bill will be even higher in 2025, even if no order of magnitude has been put forward for the moment.

It is becoming increasingly difficult to define a price for risks related to climate events, particularly floods. Some insurers are talking about a doubling of rates over the next 10 years. Last spring, a note from the banking and insurance supervisor, the ACPR (Prudential Supervision and Resolution Authority), estimated the increase in insurance prices at nearly 160% by 2050, in the worst-case scenario. But this price will not be borne solely by customers. The State will take its share, even in a context of degraded public finances.