Morningstar DBRS puts French riot insured losses below €1.2bn and urges insurers to treat unrest as an accumulation risk

Rating agency Morningstar DBRS expects the unrest that spread across France over the weekend of 17 October to cost insurers less than €1.2bn, provided the violence does not continue, Reinsurance News and Insurance Journal reported on 20 October. Analysts Marcos Alvarez and Elisabeth Rudman called this a "meaningful earnings loss" for the French market but said it is unlikely to become a capital event, according to Insurance Journal.

The agency's main point concerns the shape of the loss rather than its size. Looting and damage in several cities at the same time produce thousands of correlated claims across commercial property, motor, public property and business interruption. Morningstar DBRS therefore says strikes, riots and civil commotion (SRCC) should be managed as an accumulation risk with its own pricing, limits and reinsurance. It points to the United States, Chile and South Africa, where single waves of unrest each caused insured losses above $2bn.

Insurance Journal, citing Interior Ministry figures, reported that more than half a million people protested on the Saturday and that 2,397 were arrested. Insurers including AXA and BPCE Assurances extended the period for reporting claims from five days to 30.

France is preparing a public-private framework for riot insurance. According to Insurance Journal, it would make riot cover part of relevant property contracts and let insurers transfer a substantial share of qualifying losses to a mutualisation mechanism backed by the state and managed through reinsurer CCR. Morningstar DBRS says the scheme should reduce uncertainty over how extreme riot losses are shared. Until it starts, French insurers depend on private insurance, reinsurance and possible, sometimes disputed, recourse against the state, Reinsurance News reported. The agency also said prolonged tension could complicate France's 2027 budget.