Granular Pricing and Effective Withdrawal in Climate-Exposed Household Insurance in France
Abstract
Climate change increases the value of fine-scale risk information in household insurance, but its competitive use may weaken pooling and reduce effective availability in exposed areas. We study this mechanism in the French Cat-Nat system, where natural-catastrophe coverage is formally pooled through a regulated surcharge but accessed through the underlying household-insurance contract. First, we use controlled online quote requests to compare otherwise identical addresses with different flood or clay shrink-swell exposure. The evidence shows heterogeneous insurer responses: coarse pooling, within-commune premium differentiation, and non-quoting in some exposed micro-locations. Second, we develop a stylized dynamic pricing game with insurers that differ in pricing granularity. Numerical equilibria show that fine segmentation attracts low-risk households, shifts high-risk households toward less granular insurers, and erodes implicit cross-subsidies. Market-share constraints mainly slow this reallocation. The results highlight why climate-insurance governance must monitor local availability, not only formal coverage or aggregate market presence.
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BibTeX
@misc{dalbarade2026granular,
title = {{Granular Pricing and Effective Withdrawal in Climate-Exposed Household Insurance in France}},
author = {Raphael Dalbarade and Arthur Charpentier and Laurence Barry and Caroline Hillairet},
howpublished = {HAL},
year = {2026},
month = jun,
url = {https://hal.science/hal-05721257v1},
note = {CC BY-NC-ND 4.0},
}
RIS
TY - UNPB
TI - Granular Pricing and Effective Withdrawal in Climate-Exposed Household Insurance in France
AU - Raphael Dalbarade
AU - Arthur Charpentier
AU - Laurence Barry
AU - Caroline Hillairet
PY - 2026
DA - 2026/06/06
PB - HAL
UR - https://hal.science/hal-05721257v1
AB - Climate change increases the value of fine-scale risk information in household insurance, but its competitive use may weaken pooling and reduce effective availability in exposed areas. We study this mechanism in the French Cat-Nat system, where natural-catastrophe coverage is formally pooled through a regulated surcharge but accessed through the underlying household-insurance contract. First, we use controlled online quote requests to compare otherwise identical addresses with different flood or clay shrink-swell exposure. The evidence shows heterogeneous insurer responses: coarse pooling, within-commune premium differentiation, and non-quoting in some exposed micro-locations. Second, we develop a stylized dynamic pricing game with insurers that differ in pricing granularity. Numerical equilibria show that fine segmentation attracts low-risk households, shifts high-risk households toward less granular insurers, and erodes implicit cross-subsidies. Market-share constraints mainly slow this reallocation. The results highlight why climate-insurance governance must monitor local availability, not only formal coverage or aggregate market presence.
ER -