French Loan Insurance Reform – Property and Casualty Insurance Top Trends 2023

This article will tell you all you need to know about France’s combined ratio by line of business for property and casualty insurance, France’s combined ratios for property and casualty insurance, evolvement of France’s property and casualty insurance throughout time (2010-2020).

Property and Casualty Insurance

In February 2022, the French parliament approved a loan insurance reform law which became effective on June 1, 2022. The reform introduces three significant changes to the existing regulations.

Since June 1, 2022, and from September 1, 2022, for existing insurance contracts, borrowers have been allowed to switch insurers without any extra fees.

Individuals who borrow less than 200,000 EUR (or 213,806 USD) and whose credit is due before they turn 60 are now exempt from the medical form requirement.

The period for exercising the right to be forgotten has been reduced from ten to five years for individuals with cancer or hepatitis C.

Property and Casualty Insurance in France.

Reworded: From 2010 to 2020, the non-life insurance sector in France experienced a steady increase in market share, growing from 22% to 30% of total premium income across all lines.

The motor class of business, while showing slow yearly growth, maintained a dominant position in the property and casualty market. Personal lines also experienced steady growth, with a 46.8% gain during the same period.

However, professional and agricultural property insurance saw a decrease in premium income and was ranked third among the non-life business classes.

On the other hand, legal protection, help, pecuniary loss, credit, and surety risks showed excellent growth, with their premium revenue in 2020 exceeding that of professional and agricultural property insurance.

Construction and natural catastrophe premiums have slowed over the last decade, with construction premiums decreasing slightly and natural catastrophe premiums increasing marginally.

Premiums for property and casualty insurance in France from 2019 to 2020

Despite challenging economic and health conditions, the non-life sector remained relatively stable in 2020, experiencing a modest increase of around 1% in underwriting. Premiums increased in the lines of business that were least impacted by the pandemic, such as vehicle insurance (up by 1.3%) and personal property insurance (up by 2.7%).

However, professional/commercial property insurance was the only segment to witness a decline of 1.2% in premium income. Automobile insurance accounted for the largest market share of the non-life industry, with 39% and a premium income of 23.1 billion EUR in 2020.

Overall, the motor industry was ranked third among all classes of business (life and non-life) with a share of 11.5% in total premium income, trailing only the life-capital and health-bodily injury categories.

Property and casualty insurance is expected to account for (1):

  • 59.2 billion EUR in contributions,
  • 42.9 billion EUR in claims payments,
  • 72.5 percent gross loss ratio,
  • 12 million claims,
  • 32 610 claims per day, comprising 19 200 motor claims (-19%), 9 750 homeowners claims (-4%), and 3 660 business risk claims (+26%).

(1) Figures from the French Insurance Federation.

In France, there are two types of non-life insurance:

Property and casualty losses were incurred.

Between 2010 and 2020, the professional and agricultural property, as well as natural catastrophes categories of business, recorded the highest loss experience, with growth rates of 129% and 121%, respectively.

The loss experience decline in the professional and agricultural property as well as natural catastrophes was partially balanced by the gain in loss experience in the automotive and personal property categories of business in 2020.

Over the course of ten years, there has been a 26.2 percent increase in premiums and a 12.2 percent increase in vehicle expenses, leading to a 14-point improvement in the loss ratio.

Losses incurred: 2019-2020

The property and casualty market has seen incurred losses increase at a faster rate (+2%) than premium income (+1%) overall.

In 2020, non-life insurers are expected to process 12 million claims, equivalent to approximately 32,610 claims per day. The COVID-19 pandemic has caused a significant decrease in claims for personal lines of insurance, such as motor and homeowner’s insurance. Conversely, professional and commercial claims have increased dramatically by 26% compared to the previous year.

The loss experience for professional and agricultural risks has increased by 70.9% in one year, from 5.5 billion EUR in 2019 to 9.4 billion EUR in 2020, measured in dollars. The increase is mainly due to claims for business interruption and cancellation risks.

France’s combined ratios for property and casualty insurance.

Between 2010 and 2019, the combined ratio fluctuated from 98% in 2010 to 93% in 2011. The French Insurance Federation has not yet released the 2020 ratio, but it is anticipated to reach 98% due to the impact of the health crisis and the worsening socio-economic conditions, which would bring it back to the 2010 level.

Property and casualty insurance in France has evolved throughout time (2010-2020)
Property and Casualty Insurance
Property and Casualty Insurance 2023

France’s combined ratio by a line of business for property and casualty insurance

Except for natural disasters, the motor insurance sector has the highest combined ratios, reaching peaks of 105.4 percent in 2010 and 105.7 percent in 2016. However, in 2020, the combined ratio for motor insurance dropped significantly to 96.1 percent, the lowest among all business classes. This was primarily due to lockdowns and traffic restrictions.

The combined ratios for natural disasters exhibit significant fluctuations, with wide variations from year to year. In 2017, the ratio reached a peak of 201 percent, while in 2013 it was only 57 percent.

The combined ratio of professional and agricultural property insurance, on the other hand, is worsening, starting from its lowest reported level of 84 percent.


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