[LUM#23] Floods: Insurers Overwhelmed

[LUM Magazine] - Published on May 7, 2026 in Science and Society

As heavy rainfall becomes more frequent, flooding will occur more and more often. And the costs will keep rising for insurers, whose compensation funds are not unlimited.

October 2024. It is raining in the Valencia region of Spain. Torrential rains, with an all-time record of 179 mm per hour, cause deadly floods and result in a staggering bill: the cost of reconstruction alone is estimated at 31.4 billion euros. An extreme event that will become less and less rare as a result of global warming. “The higher the temperature rises, the more intense the rainfall becomes in many regions, so we will see more and more episodes of this kind, ” explains Yves Tramblay, a hydrologist at the Espace-Dev laboratory who contributed to the IPCC’s^Sixth Assessment Report and collaborates with all stakeholders involved in these issues.

And France is not immune to such a bill: “If we imagine flooding in Marseille comparable to that in Valence, the cost is estimated at between 3.2 and 3.9 billion euros by the Central Reinsurance Fund, ” the researcher explains. Because once the water recedes, it’s time to settle the accounts. And as with any disaster, that’s when insurers come into play.

Claim frequency

“In fact, insurers began to take an interest in the effects of climate change on natural hazards even before the IPCC was established, as evidenced by a 1973 report from the reinsurer Munich Re, which already highlighted the need to improve our understanding of the impacts of climate change on flooding,” notes Yves Tramblay. And what concerns insurers today is the loss ratio, a term that refers to the amounts paid out by a company for claims, compared to the premiums collected.

According to the Caisse centrale de réassurance, the “insurer of insurers” that handles claims for natural disasters, floods have accounted for 49% of cumulative claims since 1982, amounting to 30.2 billion euros. For the year 2024 alone, the total cost of insured damages is estimated at between 1.2 and 1.35 billion euros. “The ability to insure property is not infinite; at this rate, certain areas will become uninsurable, ” warns Yves Tramblay. In early 2025, the Association of Mayors of France sounded the alarm because 1,500 municipalities were unable to obtain insurance or were facing exorbitant rates from insurers (France Bleu, January 21, 2025).

Climate risk

According to the CCR’s estimates for flooding, the increase in damage caused by climate-related hazards is projected to range from 6% to 19% by 2050, depending on the IPCC scenario. This phenomenon is not limited to the Mediterranean region: “According to our scenarios, by 2050 and especially by 2100, the risk will increase more sharply in the north of the country than in the south, ” explains Yves Tramblay, who coordinated the 2024 Explore 2 report on extreme hydrological scenarios in mainland France. This trend is already evident, as shown by the floods that struck northern France in 2023 , causing damage estimated at 262 million euros.

In light of these projections, the researcher stresses the need to limit our greenhouse gas emissions . “We must not simply focus on adaptation strategies; we must also prevent this risk by doing everything we can to mitigate global warming, and every degree counts in our efforts to limit the severity of these hydro-climatic hazards.” Otherwise, we risk ending up with our feet in water.

Keywords: Climate, LUM#23, LUM Magazine, Research, Science, Company