Drought poses growing economic risk in France, insurance premiums likely to rise

Drought is no longer an exceptional climate event but a structural risk increasingly impacting France's economy, according to a report by the Caisse centrale de réassurance (CCR). The country has experienced unprecedented early and intense heatwaves, highlighting the growing severity of drought conditions.

Over the past decade, drought has been responsible for more than half of the damages caused by natural disasters. CCR estimates that drought-related indemnities could range from 770 million to 1 billion euros in 2025. This trend confirms a significant shift: while drought accounted for 53% of insured damage costs in the last ten years, this figure stood at 41% since 1982.

The increasing frequency and intensity of drought events are placing growing pressure on insurers, local authorities, and individuals. This situation is likely to lead to a rise in insurance premiums as the cost of managing these climate-related risks escalates. The report underscores the need for adaptation and mitigation strategies to address the long-term economic consequences of drought in France.