1 Sinaia, 22 May FIAR 2012, SINAIA, ROMANIA Session on
Catastrophic Risks Insurance Natural Catastrophe Risk Management
Experiences and perspectives Roland NUSSBAUM Managing Director of
Mission risques naturels (MRN), Paris, FR AFPCN Board, FR National
DRR Platform
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2 Sinaia, 22 May Preambles Former presentations to the Romanian
insurance market What dit happen since 5 yrs? FIAR
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3 Sinaia, 22 May An association dedicated to NatCat risk
knowledge and reduction, in partnership with public authorities,
created in 2000 between: Mission des socits dassurances pour la
connaissance et la prvention des risques naturels www.mrn.asso.fr
What is MRN ?
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4 Sinaia, 22 May Permanent staff members: engineers,
geoscientists, PhD students Collaborative network of hundreds of
correspondents : insurance companies State and local authorities
Stakeholders and thematic associations The MRN team
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5 Sinaia, 22 May Activities of the association Institutional
Operational Studies
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6 Sinaia, 22 May Geoservices Studies Extraction Cleaning
Interpreting Integration Data warehouse Observatory Transactional
and geographic DB Products and services of general interest
Analyses Reporting Methods Models GENERIC (all risks)THEMATIC (risk
specific) MRN GIS Platform
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7 Sinaia, 22 May Areas subject to storm surge Preliminary
assessment of storm surge exposure number of property assets
(personal and commercial lines / CRESTA zone) MRN asset exposure
observatory
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8 Sinaia, 22 May A web based GIS tool to support insurance
professionnals on the natural hazard exposure analysis for the
sites of a commecial lines customer MRN intranet geoservices
infrastructure Users
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9 Sinaia, 22 May R.NUSSBAUM Use of MRN conventional hazard data
sets at company level Analysis of a commercial lines porfolio
exposure to floods
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10 Sinaia, 22 May Natural Catastrophe Risk Management
Experiences and perspectives OUTLINE NatCat Insurance Schemes in
the EU 30 Yrs of French experience, Lessons learnt Risk knowledge,
a main PPP issue Concluding remarks
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11 Sinaia, 22 May Insurance Schemes in Europe source :
Insurance Europe * + Key: Optional Coverage Compulsory extended
coverage: Recently put in place In project Minimal role played by
insurers Colour intensity proportional to penetration rate of
Natural Hazard coverage Insurance schemes widely vary across Member
States due to: Different levels of risk exposure Underestimation of
risk (ie low risk perception) Lack of awareness about risk
prevention Anticipation of state aid or compensation
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12 Sinaia, 22 May 1. NatCat Insurance and risk management: 30
Years of experience in France, as an example Loss records Lessons
learnt from a recent event: Xynthia An integrated DRM scheme
Insurance component Prevention component Risk basin strategies /
governance towards sustainability Lessons learnt and further
developments
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13 Sinaia, 22 May subsidence Sources : FFSA-GEMA (2011) &
MEDDTL / BD GASPAR (2011) Author : MRN May 2011 windstorms floods
1.1. Property damage losses caused by natural catastrophes in
France AFIR 6 Special Session I
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14 Sinaia, 22 May Sources : FFSA-GEMA (2011) & MEDDTL / BD
GASPAR (2011) Author : MRN May 2012 AFIR 6 Special Session I 1.1.
Property damage losses caused by natural catastrophes in
France
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15 Sinaia, 22 May Carte de rpartition par dpartement de la
centaine dvnements complmentaires source BD GASPAR, SANDRE,
traitements MRN
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16 Sinaia, 22 May 1.2. XYNTHIA 28 February 2010 Winter storm
and storm surge
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17 Sinaia, 22 May 1.2. Property damage losses Xynthia Event 28
February 2010 53 fatalities and 79 injured people in France More
than 2.5 bn of economic losses, out of which 1.5 bn insured losses
CoverTotal insured loss Nb of ClaimsAverage cost CATNAT (storm
surge) 0,75 bn 35 00021 000 Windstorm0,75 bn 435 0001 700
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18 Sinaia, 22 May 1. NatCat Insurance and risk management: 30
Years of experience in France, as an example 1.3. An integrated DRM
legal and regulatory scheme FIAR 2012
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19 Sinaia, 22 May 1.3. An integrated DRM scheme (1) Mapping
environmental risks, according to insurability and associated
insurance solutions in France Storm Hail Snow Hurricane Earthquake
Volcanic Landslide Subsidence Avalanche Flood ) Assurablility Cover
TGNCATNAT CatTech Risks (law 21 July 03) Natural hazards
Technological other environmental risks CatTECH IRD RI
Environmental liability insurance ASSURPOL Pool Domino effects
Environmental liability (law 01 August 08) Mesurable deteriorations
: Water Soils Protected Species and Habitats Mesurable impacts on
their ecological services Forest Fire Thunder
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20 Sinaia, 22 May 1.3. An integrated DRM legal scheme (2)
NatCat 1982 law, revised 1995, 2003
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21 Sinaia, 22 May Compulsory extended coverage to property
damage contract Cover type, level of premium and basic deductible
are the same for all insureds, adopted by law Insurance-like
business, excess of annual losses by direct insurers are topped at
100 % loss ratio on retention after 50% quota share State operating
as reinsurer of last resort, on top of CCR (State owned reinsurance
company) both QS & annual stop loss reinsurance treaties The
cover (indemnity based, no limitation) is triggered by
administrative recognition of natural catastrophe at the level of
each affected municipality 1.3. Main features of NatCat insurance
scheme Insurance compoent AFIR 6 Special Session I
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22 Sinaia, 22 May 1.4. Risk reduction incentives within the
CATNAT scheme RISK REDUCTION COMPONENT AFIR 6 Special Session
I
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23 Sinaia, 22 May Risk reduction incentives within the CATNAT
scheme RISK REDUCTION COMPONENT AFIR 6 Special Session I
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24 Sinaia, 22 May Risk reduction incentives within the CATNAT
scheme RISK REDUCTION COMPONENT AFIR 6 Special Session I
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25 Sinaia, 22 May A 12% levy on NatCat premium (150 Mio ) is
financing a public Fund ( Barnier Fund ), dedicated to subsidize:
At individual level (must be insured): o Expropriation from highly
exposed assets o Friendly acquisition of property if severely
affected o Vulnerability reduction measures within the limit of 40
% of total costs ( studies and works) At community level : o PPRN
studies (50 % of their costs) o DRR structural and non structural
measures taken by communities (PAPI, PSR), within the limits of 20
to 40 % of their total costs o Risk awareness raising and
insuruance information campaigns Risk reduction incentives within
the CATNAT scheme Volet prvention
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26 Sinaia, 22 May 1. NatCat Insurance and risk management: 30
Years of experience in France, as an example 1.4. Risk basin
strategies / governance towards sustainability FIAR 2012
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27 Sinaia, 22 May Risk retention and transfer along LEP Curve
(for floods under NatCat regime) Without DRR measures at risk basin
levelWith structural DRR measures at risk basin level
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28 Sinaia, 22 May Source : Stratgie damnagement lhorizon 2013
pour lutter contre les inondations sur le bassin de lOise, Entente
Oise Aisne, 2009 1.4. Flood risk reduction strategy of a floodplain
management authority (1)
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29 Sinaia, 22 May 1.4. Flood risk reduction strategy of a
floodplain management authority (2) Source : Stratgie damnagement
lhorizon 2013 pour lutter contre les inondations sur le bassin de
lOise, Entente Oise Aisne, 2009
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30 Sinaia, 22 May 1. NatCat Insurance and risk management: 30
Years of experience in France, as an example 1.5. Lessons learnt
and future developments FIAR 2012
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31 Sinaia, 22 May 1.5.1. Lessons learnt Too many events
unavoided, Several significant events, but No extreme event in 30
yrs Very efficient/popular scheme, despite compulsory extension
Delayed DRR policies and measures, although recent significant
improvements at all levels, but effects on average annual loss are
a long term issue FIAR
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32 Sinaia, 22 May
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33 Sinaia, 22 May 1.5.2. Future developments Implement risk
knowledge, as major DRR governance decision making tool (see 2.),
involving stakeholders as producers and/or end users Proposal of a
law introduced last month, with the following main changes on FR
NatCat scheme: Introduce objective recognition criteria for events
Allow insurers to differentiate NatCat ratings for commercial lines
Restricted conditions for subsidence coverage FIAR
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34 Sinaia, 22 May 2. Risk knowledge, a main PPP issue
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35 Sinaia, 22 May 2.1. Present situation of NatCat risk
knowledge in FR Public hazard data are a main input to insurance
market, through MRN hazard / risk knowledge management tools :
Observatories of public hazard data coverage, exposure, public
prevention policies efficiency Services to the insurance companies
Launching of a National Observatory for Natural Risks (ONRN), as a
main imput for DRR governance decision making, with public/private
stakeholders Data sets coverage & quality evaluation, sharing
& dissemination, Hazard/Risk mapping, open source modelling
methodologies and decision making tools development & uses
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36 Sinaia, 22 May
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37 Sinaia, 22 May 37 Sample flood risk indicators (1)
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38 Sinaia, 22 May Sample flood risk indicators (2)
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39 Sinaia, 22 May Sample flood risk indicators (3)
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40 Sinaia, 22 May Concluding remarks
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41 Sinaia, 22 May To summarize on DRM/DRR and related domains:
legal/cooperation frames, at international, regional and national
levels DomainUN scaleEU scaleFrench scale Prevention HFA* Dir.
Flods (2007) Dir. INSPIRE (2007) EUROCODES 8 & 20 CCA & DRR
Strategies Codes (2003) environment, spatial planning,
construction-habit. Civil Protection MDG HFA IDRL (Intl Red Cross
Red Crescent) Financial Instrument (2007) Communautary mechanism
(2007) New civil protection law (2004) Economic resilience (incl.
Risk transfer) MDG HFA IAIS Art. 122.2 Treaty EUSF (2002) Dir.
Solvency II (2009) EIOPA / Cat TF Code envt: Fds Barnier Insurance
Code;: Insurance scheme Prudential regulations (*) Hyogo Framework
for Action and Millenium Development Goals Other domains of UN
conventions integrating NatCat prevention (by order of apperance) :
Heritage, Human Rights, Cross border rivers and lakes, Alpine
region, CCA
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42 Sinaia, 22 May Trend towards integrated DRM costs control Is
it an equilibrated country profile? Source : PLANAT, 2007, Safety
at which cost?
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43 Sinaia, 22 May Conclusion Major trends for NatCat insurance
schemes Integration of Risk Financing and Transfer within DRM at
most governance levels Convergence towards: Risk metrics methods,
including LP-HI scenarios, Loss, exposure and DRR policy data
shared at appropriate aggregation level, Holistic risk based
approaches & decision making tools Risk governance bodies
involving stakeholders, all relevant scales Innovative risk
transfer and public private partnerships to address these
issues
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44 Sinaia, 22 May Wood sculpture of Atlas cedar tree, that was
fallen by MARTIN Storm of 27/12/99 [email protected]
Thank you for your attention