For the fifth consecutive year, the insurance bill for French companies will rise significantly during renewals next January, which concern the majority of contracts. ” Prices will increase by an average of 5 to 10%on all lines of the market, after an increase of 5% this year, announces Alain Ronot, vice president of Amrae, the association that brings together directors of risk and insurance in French companies.
Added to this is the continued decline in the insurance companies’ capacity and the increase in the deductible. This ultimately results in more expensive and more limited coverage. »
The association presented its findings on Monday in its annual report on business insurance and prepared with six major brokers: Aon, Brokerslink-Filhet Allard, Diot-Siaci, Marsh, Verlingue and WTW.
Pressure from reinsurers
“We were hoping for identical renewals after the increases of recent years linked to the insurance companies’ desire to improve their financial results and to the Covid crisis. But nothing happened, explains Alain Ronot. The war in Ukraine and inflation result in further price increases, reinforced by the latest announcements from reinsurance companies. »
Meeting in September in Monaco and these days in Baden-Baden, Germany, the insurers’ insurers have advanced double-digit increases in their 2023 tariffs, also citing the soaring climate demands.
In some industries where premiums may increase by 30-50% in 2023, “Insurability becomes very difficult, even impossible,” says François Beaume, also vice president of Amrae. The price increases will thus be much higher than average for aggravated risks, such as the civil liability of pharmaceutical groups and certain players (in light of health and legal risks) or in the coverage of waste from company fires treatment and wood processing”, he continues.
However, some market segments are benefiting from an upswing, e.g. the civil liability of cargo charterers, company managers and company car fleets. “In these niche markets, there is strong competition between insurance companies and therefore available capacity without the impact of inflation at this time,” says Alain Ronot.
Blind spot in Russia
However, with a blind spot for the entire market, namely the activities and facilities of French groups in Russia, Ukraine and Belarus. “Due to Western sanctions, it is not currently possible to cooperate with international brokers to insure with local companies, which entails an additional risk”, points out François Beaume.
The situation also remains difficult in terms of cyber risks. Digital attacks and failures remain one of the top three dangers globally, behind climate and geopolitics, for experts polled elsewhere as part of AXA’s “Future Risk Report”, published on Monday 24 October.
Self insurance
Insurers’ cyber capabilities have halted their decline, but “all the other parameters are deteriorating” and coverage remains grossly inadequate to meet business needs, notes Amrae. France has decided to set up working groups on the subject under Bercy’s auspices. The planning proposal from the Ministry of the Interior (LOPMI) also plans to approve compensation for cyber-ransoms, a highly controversial topic.
In contrast to insurance compensation for ransom, Amrae is returning to the levy of a tool that is supposed to fill the gaps in the cyber market and insurance in general: captive insurance, these structures that allow companies to co-insure or reinsure part of their risks themselves . . Economy Minister Bruno Le Maire last week opposed the tax reform project to facilitate the creation of these entities.