Priority for the planet, a collective commitment
The year 2023 was the hottest year ever recorded in the world, according to the UN World Meteorological Organization, NASA and the National Oceanic and Atmospheric Administration (NOAA). To curb this increase in temperature, but also to reduce the risk of extreme weather events, the energy transition is under way. This commitment responds to strong societal expectations. Thus, 73%1 of French people say they are in favour of renewable energies to ensure France’s energy independence and because they clearly see the impact of climate change on their daily lives. And a very large majority of them (94%2) are putting their words into practice, through at least one everyday energy-saving action: turning off lights, turning down the heating, limiting their consumption of hot water etc. However, serious obstacles remain on critical issues, such as sustainable mobility and thermal renovation of homes, mainly for financial reasons.
While the need to act in response to the climate emergency applies to everyone, citizens and economic actors alike do not see themselves tackling this situation alone. Thus, 88%3 of business leaders expect the State to adopt a more interventionist policy on environmental issues.
For insurance, new opportunities and new risks
Insurers have been there in all the major global revolutions of the last few centuries. In recent years, they have been mobilising on several fronts in the face of the climate emergency. This includes the development of socially responsible investment, impact finance and Green Bonds, bringing in particular the promise of a reorientation of investments towards activities with low CO₂ emissions and, overall, a low-carbon economy.
However, the increase in the frequency and intensity of extreme weather events and the associated peak losses make it necessary to adapt the French insurance system. Studies carried out by the Caisse Centrale de Réassurance for the period to 2050 conclude that the expected increase in climate-related losses is between 47% (IPCC scenario RCP4.5) and 85% (IPCC scenario RCP8.5). However, some municipalities, the ones most threatened by rising water levels, are already unable to find an insurer to cover them against storms or floods because of the major worsening of their risks. They are committed to implementing prevention plans to limit their vulnerability.
The specific features of the French insurance system – in particular the existence of the natural disaster compensation scheme, based on national solidarity and mandatory cover for storms – make it possible to cover a very large majority of insured assets in France. The reform of the crop insurance scheme launched on 1 January 2023 is part of this overall adaptation approach. However, the recent climate-related loss experience is creating new challenges for preserving the balance of the system and broad cover for policyholders.
An interministerial mission charged with drawing up recommendations on the challenges and evolutions of the French insurance system in the face of climate risks was launched in May 2023. This should produce some promising approaches to solutions.
Markers
- 82%4 of French people believe that climate change will have a direct impact on their lives in the next ten years.
- 85% believe that adaptation to this change must be a priority.
- 48%5 of French people believe that “the energy transition is above all a positive opportunity to rethink our ways of living and our models of society”.
- 28% believe that it is “above all a constraint that requires sacrifices and renunciations in our way of living and our society”.
1 ADEME: opinion poll on air quality and energy 2023
2 *ADEME: opinion poll on air quality and energy 2023
3 **ADEME: “SOCIAL REPRESENTATIONS OF CLIMATE CHANGE” 2023
4 IFOP for Intercommunalités de France – 2023
5 Ipsos for RTE 2023
6 A non-life insurance joint venture in China, Groupama-AVIC is 50% owned by Groupama and 50% by the aerospace company AVIC (Aviation Industry Corporation of China).
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Crop insurance: Groupama makes the difference
Groupama has initiated a proactive and educational policy on the new version of its crop insurance, which came into effect on 1st January 2023.
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The results of this mobilisation are positive, better supporting farmers in the face of climate hazards, strengthening the resilience of their farms and contributing to our food sovereignty. More than 1 million hectares have been newly insured, and progress has been made in all sectors. For Grassland Insurance in particular, close to 60% of the areas insured in 2023 were insured by Groupama, or nearly 700,000 hectares.
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The first farm’s insurance dedicated to low-carbon agricultural projects
The Low-Carbon Label certifies greenhouse gas emissions reduction and/or carbon sequestration projects.
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It allows farmers to benefit from the financial support of private or public actors who wish to offset their incompressible greenhouse gas emissions. Groupama has created the Low-Carbon Borrower offering to protect the financing of a Low-Carbon Label project in the event of the farmer’s death, loss of autonomy or disability. This novel insurance is directly integrated into the agricultural projects labelled by Stock CO2, Groupama’s carbon-offsetting operator partner.
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A new agricultural licence in China
Groupama-AVIC, 50% owned by Groupama and 50% by the aerospace company AVIC, has obtained an agricultural licence for China’s Shandong province, one of the most populous in the country. This is the ninth region covered by Groupama-AVIC, which is, to date, the only foreign insurer to operate in agricultural insurance on the Chinese market.
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A growing impact of the forests
Groupama Immobilier has completed its fifth acquisition of forest areas in five years, 800 hectares south of Saint-Dizier and Lake Der in Haute-Marne. These oak trees are biodiversity refuges, especially for migratory birds. The aim of these successive investments is to maintain, sustainably manage and regenerate the acquired forests, in order to preserve their carbon sequestration capacity. The Group is engaged in a proactive approach to contribute to the creation of a major “made in France” timber production chain to supply wood for construction and decarbonise buildings.
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Groupama strengthens its ESG Climate policy
Groupama is committed to the definitive elimination of thermal coal from its investment portfolios by 2030 in EU and OECD countries and by 2040 in the rest of the world.
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In addition, the Group has decided to stop all new direct investments in companies contributing to the development of new unconventional oil and gas projects, except for financing needs specifically geared towards the transition. At the same time, the Group aims to reduce the carbon intensity of its equity and corporate bond portfolios by 50% between 2021 and 2030, on a trajectory of alignment with the Paris Accords.
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Eco-friendly actions challenge
During the summer of 2023, 23 companies of the Groupama Group mobilised to develop eco-friendly actions in order to control their energy consumption, adapt their water consumption and reduce the use of air conditioning. Some 3,085 commitments were made by employees on these three themes.
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Innovation award in China
At the sixth China International Import Expo (CIIE), held in Shanghai from 5–10 November 2023, the “Fish Mushroom Rotation Model” won the 2023 Innovation Award for French-Chinese teams, in the “Innovative Product” category, organised by the France-China Committee.
This project is part of Groupama’s new agricultural insurance policy focused on green innovation. The Groupama-AVIC joint venture6 has chosen to focus on a new model of rotational polyculture – alternating between fish farming and mushroom farming – whose objective is to revolutionise aquaculture.
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Groupama backs the energy transition in Romania
Strongly committed to sustainable development and reducing its carbon footprint, Groupama Asigurari, one of the leaders in the Romanian insurance market and first in the agricultural sector, has installed solar panels and heat pumps in several of its branches and at its second head office in Bucharest.
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Gan Assurances Expertise Day: energy transition
For the second Gan Assurances Expertise Day, nearly 150 general insurance agents gathered to talk about the energy transition in insurance, echoing the theme of climate change addressed during the first Expertise Day in 2022.
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Round tables and dialogues with experts allowed in-depth exploration and discussion of these major ecological and economic issues and how insurers can support their customers in these necessary transitions.
