French public-private scheme established in 1982 enabling natural disaster damage to be covered via a compulsory surcharge backed by an unlimited state guarantee.
The CatNat scheme is a public-private hybrid mechanism created by the Act of 13 July 1982 that automatically extends every property and casualty contract to cover natural disasters recognized by ministerial decree. Its funding rests on a uniform surcharge, set at 12 percent of property premiums until 31 December 2024, then raised to 20 percent on 1 January 2025, the first increase since 1999. The direct insurer compensates the insured, then may reinsure with the Caisse centrale de réassurance, a company wholly owned by the state and backed by its unlimited guarantee. The scheme explicitly aims to cover risks that the private sector alone would deem uninsurable, notably flooding, drought-related clay shrink-swell, mudflows and earthquakes. Its distinctive feature is the uniform rate applied to all insureds regardless of their actual exposure, a deliberate solidarity choice that introduces cross-subsidization between unexposed zones and exposed ones. The counterpart of this universal accessibility is an absence of pricing incentive for prevention. The scheme ran a technical deficit from 2016, its reserves having fallen by 46 percent between 2015 and 2022, which prompted the surcharge increase from which the Treasury expects 1.5 billion euros in additional annual revenue.
A homeowner in a Loire flood zone pays the same 20 percent CatNat surcharge as a mountain homeowner with no flood exposure. When their municipality is recognized as a natural disaster area by interministerial decree, their insurer is required to compensate them on the basis of the pre-loss state of the property, subject to a statutory deductible of 380 euros for private individuals, before reinsuring with the CCR.
CatNat, régime catastrophes naturelles, surprime CatNat, garantie CatNat, caisse centrale de réassurance