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Granular Pricing and Effective Withdrawal in Climate-Exposed Household Insurance in France

Author

Listed:
  • Raphael Dalbarade

    (ENSAE-CREST, Institut Polytechnique de Paris, GCL - Generali Climate Lab)

  • Arthur Charpentier

    (UQAM - Université du Québec à Montréal = University of Québec in Montréal)

  • Laurence Barry

    (Chaire PARI (Palaiseau))

  • Caroline Hillairet

    (ENSAE-CREST, Institut Polytechnique de Paris)

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.

Suggested Citation

  • Raphael Dalbarade & Arthur Charpentier & Laurence Barry & Caroline Hillairet, 2026. "Granular Pricing and Effective Withdrawal in Climate-Exposed Household Insurance in France," Working Papers hal-05721257, HAL.
    • Handle: RePEc:hal:wpaper:hal-05721257
    Note: View the original document on HAL open archive server: https://hal.science/hal-05721257v1
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