The July 2021 floods were moderate in France relative to the flooding in Germany and the Benelux countries. Some flooding occurred in the Northeast and particularly in the Lorraine region, where dozens of homes flooded along with many roads. The most severe damages were agricultural, resulting in a decline in crop yields. The French government declared the event a “natural catastrophe” in 240 municipalities and the State reinsurer Caisse Centrale de Réassurance (CCR) ranked it as "Moderate" (level 3 of 5).¹

In early April 2021, an intense late deep freeze gripped most of France and became the nation’s most costly agricultural insurance event since the introduction of multi-risk climate crop insurance in 2005. This event caused significant damage to crops, affecting many vineyards and farms in 10 of the 13 regions of metropolitan France.

While France did not experience severe drought and subsidence in 2021, these events have become more common, occurring in 2018 and 2020. Over the last 20 years, the CCR only ranked four events as "Extremely severe" (level 5 of 5), and three of them were droughts.

Human loss

No fatalities were reported in France.

Economic impact

The total cost of the July 2021 floods is still unknown but is expected to be moderate given the relatively low number of affected homes.

Impact on insurers

In France, flood insurance is mandatory for all fire contracts; therefore, the insurance penetration is very high. Because the July floods qualified as a “natural catastrophe,” the CCR reinsurance scheme applies and significantly mitigates insurance industry costs.

In response to the April 2021 deep freeze, the State provided financial aid to farmers. In this context, a report ordered by the government on risk management in agriculture was issued in July 2021. This report recommends promoting the development of insurance for risks which are insurable and public intervention for extreme climate events. The Milliman white paper La couverture des risques agricoles au sein de la ferme France (milliman.com) provides more detail.²

Outlook for the future

According to a 2018 study conducted by CCR, the cost of natural disasters would increase by 50% by 2050 within the base case scenario, as explained by the sum of the following additive impacts:

• In the metropole, the total annual mean cost of events (all things being equal) is expected to grow by 35% over 30 years. Looking at stand-alone impact by peril, the average annual loss will increase by 28% for droughts, 38% for floods, most likely linked to an increase in the frequency of heavy rains, and 82% for coastal submersions.
• An additional 15% increase in damages is expected due to risk concentration in high-risk areas located close to coasts and rivers, based on actual demographic trends.

The geographical repartition of these results highlights strong territorial disparities. The Atlantic seaboard, under the effect of demographic evolution and the rise in sea level, would see the damage increase by more than 60% in certain places. The vulnerability in Île-de-France would result in an increase of more than 40%. The increase would be around 30% for departments around the Mediterranean area. These results allow us to highlight territories that should be the subject of specific prevention policies, as illustrated below.³

For questions or more information on country-specific climate change and risk management, contact the author listed here or your usual Milliman consultant.

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¹ CCR (18 February 2022). Floods in the Northeast in July 2021. Retrieved 11 March 2022 from https://catastrophes-naturelles.ccr.fr/-/002126_inondationsnordestjuillet2021.

² Poncelot, V., Taillieu, F., d'Antin, H., & Ballard, F. La couverture des risques agricoles au sein de la ferme France. Milliman White Paper. Retrieved 11 March 2022 from https://fr.milliman.com/fr-FR/insight/la-couverture-des-risques-agricoles-au-sein-de-la-ferme-france.

³ CCR (September 2018). “CONSÉQUENCES DU CHANGEMENT CLIMATIQUE SUR LE COÛT DES CATASTROPHES NATURELLES EN FRANCE À HORIZON 2050. ” Retrieved 13 March 2022 from https://www.ccr.fr/documents/35794/35836/Etude+Climatique+2018+version+
complete.pdf/6a7b6120-7050-ff2e-4aa9-89e80c1e30f2?t=1536662736000.