French riots put property insurers’ SRCC exposure under scrutiny

France’s October riots are shaping up as a significant test of strikes, riots and civil commotion (SRCC) cover, exposing the potential for losses across multiple cities to accumulate on primary insurers’ balance sheets.

The scale of destruction points to a substantial claims bill, although an insured-loss estimate has yet to emerge from the supplied assessments.

Jess Middleton, senior Europe analyst at Verisk Maplecroft, said: “The scale of the damage suggests this weekend’s riots could ultimately prove more costly than the unrest that followed the death of Nahel Merzouk in 2023.

“While it will take time for claims to be fully assessed, this weekend’s unrest is shaping up as one of France’s most significant ever SRCC events,” he added.

Insurer credit rating agency AM Best said it expects property policies to bear most of the claims, with specialist political violence and terrorism (PVT) insurers less exposed because of that market’s limited participation in French SRCC risks.

Reinsurance protection may also prove less responsive than the scale of the unrest might suggest, AM Best observed.

“The reinsurance impact is likely to be small due to higher retentions on property catastrophe excess-of-loss treaties and stricter terms and conditions that may make it more difficult for direct insurers to aggregate losses to reach the reinsurance threshold,” AM Best said.

For primary insurers, the distinction matters, according to the rating agency’s analysis.

Widespread damage does not necessarily translate into recoverable catastrophe losses, leaving treaty retentions and aggregation provisions central to the eventual distribution of claims.

Correlated losses challenge diversification

Verisk’s analysis describes commercial damage across at least nine cities, alongside attacks on public buildings and severe fire damage to historic properties. Carrefour alone reported 50 stores damaged.

The geographic pattern broadly matched its pre-event modelling. France ranked ninth highest risk globally in Verisk’s Global SRCC predictive scores, while the five highest-scoring départements accounted for an estimated 45% of damaged properties identified by 20 October.

AM Best sees the speed of mobilisation as an increasingly important driver of accumulation.

“The democratisation of social media and messaging platforms allows for rapid mobilisation,” AM Best said.

These digital tools have enabled groups to increasingly organise mass demonstrations with precision and rapidity, resulting in highly correlated, simultaneous property losses across urban centres (similar to catastrophes),” its analysis added.

For underwriters, this challenges assumptions about diversification between cities, commentators agreed; separate locations can suffer damage almost simultaneously, making portfolio concentrations and event definitions consequential.

State support will not cover recent losses

The unrest comes as France prepares a mandatory riot insurance guarantee within property cover.

According to AM Best, legislation passed in February 2026 envisages support of up to €4 billion through France’s state-backed reinsurer CCR.

However, implementation remains uncertain, AM Best warned.

“The decree is awaiting publication, pending the EU’s approval. The decree was expected to be implemented in January 2027; however, a final agreement is yet to be reached and the timelines may slip, putting additional pressure on direct insurers,” AM Best said.

The proposed scheme could broaden protection, but insurers must manage the current claims burden under existing arrangements.

“However, these new arrangements will not cover recent losses,” AM Best added.

For insurers, the challenge extends beyond settling October’s claims.

Pricing, limits and reinsurance protection must accommodate the possibility of repeated unrest, while restrictions on cover risk widening the protection gap the proposed state scheme seeks to address.

“Further violence is not inevitable, but protests linked to the underlying grievances, including cost-of-living pressures and discontent over public services and education, are likely to persist, putting continued pressure on the government to demonstrate that it can maintain order,” Middleton added.