The moral economies of natural disasters insurance: solidarity or individual responsibility?

Abstract

ABSTRACTOver the second half of the twentieth century, the moral economy of insurance has shifted from solidarity and mutual support to individual responsibility. In this context, the French regime for the protection against natural catastrophes that took shape in the 1980s exemplifies a strong and almost anachronical political will to foster solidarity at the national level, thus questioning the moral economy of responsibility. This paper offers a textual analysis of the official debates that led to the launch of the regime. It shows how the representatives chose to separate compensation, financed by equal individual participation, from state prevention. This contrasts with other schemes worldwide that rely on rational decision theory to situate the responsibility for prevention at the individual level. In this alternative, risk-based premiums play a theoretically crucial role in risk signals. In practice, however, they lead to affordability issues while failing to govern prevention as theoretically expected. With the climate crisis exacerbating this phenomenon, the examination of the French regime thus allows to fruitfully revive other moral economies of insurance.KEYWORDS: Natural disasterssolidarityresponsibilitypreventioninsurance AknowledgementI wish to thank Andy Rosenhek, Thierry Cohignac, Antoine Quantin and four anonymous reviewers for their insights and comments on previous versions of this paper.Disclosure statementNo potential conflict of interest was reported by the author.Notes1 For a conceptual and historical analysis, see Baker 1996.2 Respectively: Fonds de secours aux victimes de sinistres et calamités and Fonds National de Garantie des Calamités Agricoles. The latter still operates on non-insurable damages to specifically agricultural properties.3 The process of finalizing a law in France has several stages: once an initial text has been proposed, it is discussed and amended by both parliamentary chambers (National Assembly and Senate) separately. For this purpose, each chamber nominates a commission in charge of studying the proposal of the other chamber and formulating amendments to the text of law. The Assembly or the Senate then discuss the former report, and the amended text goes back to the other chamber for further discussion and approval. This can imply a series of back and forth between the two chambers. If the two chambers cannot agree on a formulation after two readings of each, they nominate a mixed commission with members of both parliaments in order to reach an agreement. This happened in the case of the CatNat regime law.4 All the translations of official texts are mine.5 Other than national schemes relying on traditional insurance products, other mechanisms for climate risk mitigation are emerging such as index or parametric insurance, and cat bonds (Johnson Citation2020; Booth Citation2020), which are out of the scope of this paper.6 Symptomatically, I want to argue, Christophers (Citation2019) quotes a passage from Crichton (Citation2005) that seems to put the blame on subsidies (‘planners and developers [had] taken the continuing availability of cheap flood insurance for granted’), whereas Christon’s main argument is that ‘non-structural measures, such as planning controls and sustainable drainage’ should be the preferred solutions (Crichton Citation2005, 5, emphasis added).7 Starting 04/2022, a new rate reform – still striving for more accuracy to risk –is under implementation, the results of which are not yet available (Horn Citation2022).8 Furthermore, since the cover includes a bundle of disasters, all communities are exposed to one peril or another. Hence CCR recently declared that 99% of the communities had benefited from the regime during its first 40 years of existence (‘Citation40 Ans Du Régime #CatNat FR’ Citation2022).Additional informationFundingThis study was supported by the Chaire PARI - project « Evaluation des Risques et Technologies du Big Data : Outils et Conséquences », Fondation Institut Europlace de Finance.Notes on contributorsLaurence BarryLaurence Barry is the co-chair of Chaire PARI (ENSAE/Sciences Po Paris), an Associate Lecturer at the Hebrew University of Jerusalem and an actuary. Her subjects of interest are neoliberalism, Foucauldian studies, the intertwinement of specific rationalities with modern power and its recent digital turn. Her current research project with PARI deals with the impact of big data for the ‘insurance societies’ (sociétés assurantielles). Her articles have been published by the Journal of Business Ethics, Big Data & Society and Theory, Culture & Society. Her book, Foucault and Postmodern Conceptions of Reason, was published in 2020.