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Gen Re is pleased to present the results of our yearly review of fire losses in the French market. All the market’s key insurance players took part in our study, representing more than EUR 3B of aggregated insured losses over the last 10 years.
The survey covers the period 2010‑2020 and comprises hundreds of individual fire losses totaling EUR 3.5B. The study is restricted to French property business and around slightly more than one-third of the survey panel is made up of medium-size insurers (having EUR 80M‑1B turnover); altogether the survey includes more than 60% of all fire commercial insurance in France, excluding the corporate risks segment.
Our analysis focuses on pure fire losses with loss amounts above EUR 3M: no natural catastrophe events were considered, although business interruption losses caused by fire are included.
The main takeaway is that annual aggregate fire losses have grown consistently since 2014, with record years in 2018 and 2019. Loss experience for accident year 2019, which was worse than 2018 by the end of 2020, continues to deteriorate in the 2021 view.
It’s worth noting that accident year 2020 is not yet complete in our dataset and no adjustment has been made to account for the potential impact of pandemic lockdown on fire claims handling activity.
Our analysis of the size and frequency of claims in each year reveals a rising trend over time. One major loss above EUR 40M occurs every three years in the 2010‑2020 period and one every year since 2018.
Despite increasing loss frequency combined with rising severity, we don’t observe any significant trend regarding declared values insured (the cost of rebuilding the insured premises), which are usually well-above reported losses.
The French insurance market’s fire loss burden varies according to the different exposures. Food industry risks, storage facilities and buildings such as offices and apartment blocks account for half of the total fire losses incurred by French insurers.
Interestingly, the share of losses produced by the buildings segment has grown over the years and currently stands at more than EUR 400M of aggregate losses, compared with EUR 250M in the 2018 study.
We think our analysis of the insured loss data provided by clients reveals an important trend in the French fire market – that fire damage is on an upward curve. Please reach out to your Gen Re representative if you have any specific follow up questions about the findings or simply want more information.
Gen Re recognises that market intelligence is valuable in today’s competitive marketplace and we aim to share it whenever possible. Looking ahead, we recently completed a similar study for the Nordic insurance markets and we will release our findings here soon.
All Gen Re data used in this blog are proprietary.
