Today, climate risk is one of the biggest risks for insurance companies in France. It is absolutely necessary to “protect the insurance options of companies and individuals” by “focusing on prevention”, warns Thomas Buberl, head of Axa insurance.
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Axa is a world leader in the insurance sector with 7 million customers in France. In 2023, the cost of climate disasters reached €6.5 billion in France, a 40% increase over the last 10 years. In order to approach the future, the boss, Thomas Buberl wants to develop prevention and the use of technologies that make it possible to better predict the climatic events that have multiplied.
Thomas Buberl: Climate risks, all this is very expensive and we certainly never expected this level of risk in 2023. Major events that are predictable over time, such as hurricanes, sometimes cost less because the prevention put in place by states, companies, individuals help and go. However, we have many new events – floods, droughts, fires – that appear where we do not think, why prevention is difficult, and that is what makes the bill heavy.
Axa is present in around 50 countries. Is this specific to France or do you observe the difficulty of predicting these phenomena anywhere in the world?
Unfortunately, we see this phenomenon everywhere. In China, in the US, in Europe, everywhere. In France, we found a mechanism which is a mixture of private and public, which works very well and which also helps to mitigate the heavy burden of disasters.
With the so-called “Cat Night” bonuses for natural disasters. It is actually a rather special system, public-private. We saw that the government had planned to increase the Cat Nat premium in 2025. What will be the consequences for insurance prices?
If we want the insurance to work and remain a tool of trust, the invoice must “work”. This means that if damages increase, premiums must also follow. We have a much higher loss rate, which is why the topic of prevention is so important.
How much is the increase expected next year?
It is not yet clear, because once again we have to see exactly what the costs are. However, if costs were 40% more in 2023 compared to the last ten years, the increase will never be of that magnitude, but we must prepare for a significant increase.
For individuals and companies?
Exactly, yes.
You said: “The most important thing is prevention”. What do you do to implement prevention and not end up having to pay more and more expensive insurance?
First of all, the good news is that we can clearly see that prevention works. If we want to build a new factory, we need to build it in a place that is less dangerous. If we rebuild, we must rebuild with more sustainable methods than before. There are lots of things we can do to avoid future disasters.
Basically, you don’t provide insurance if it doesn’t meet a specification?
No, our policy is to help. This is in our interest because we are all there to protect the insurable interest of the risk. Nobody has an interest if a risk can no longer be insured. Otherwise we fall into a social divide that no one wants. And that’s why everyone, states, insurance companies, individuals, businesses have an interest in protecting themselves and doing more prevention.
For example, we need to think about changing planting cycles to avoid drought. We must also use the possibilities of the new technologies, through satellite images, through sensors, to understand what type of fire risk we may have. There are lots of methods and companies increasingly want to use these methods. We have created a company within Axa, called Axa Climate, with today more than 200 researchers specializing in climate, who consult and help companies to adapt.
Is this a new market for you?
Yes, but there are many requests and it is something that works, which did not exist a few years ago, and which can make it possible to reduce the bill – for individuals and for companies – and to continue the insurance of these risks .
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