2
Unprofitable = uninsurable Benoît Bréville | Translated by
MAY 2024 | LE MONDE DIPLOMATIQUE
TEMPERATURES RISE ACROSS THE MIDDLE EAST
Israel-Iran: spiral to war in the Middle East
Commentators wrote off Iran’s drone and missile attack on Israel last month as an attempted show of strength that revealed weakness. That misreads the dynamics of a complex and volatile situation Akram Belkaïd | Translated by George Miller
When he was CEO of the AXA Group, Henri de Castries warned that if the climate crisis got worse, it would be unwise to rely too much on insurance companies. ‘A two-degree rise in the global average temperature may still be insurable,’ he said in 2015, ‘but what’s certain is that a four-degree increase is not.’ In the end,
just 1.2°C of warming was enough to make State Farm, a heavyweight in this sector, pull the plug on California. Why? Because of ‘rapidly growing catastrophe exposure’. For the past year, State Farm has not been issuing new contracts for Californian homes and businesses, and has just cancelled 72,000 policies. This approach is becoming increasingly common in the US, especially in Louisiana, where 17% of homeowners had their policies cancelled in 2023. Unhappy customers may turn to competitors, who will offer them prohibitive rates and bizarre exclusions, such as damage caused by disasters which have names, like hurricanes.
Storms, droughts, floods... Around the world, the proliferation of climate hazards means insurers’ losses are stacking up. And when they occur, insurers know exactly what to do. If a risk becomes too costly, they up their premiums; if that doesn’t work, they withdraw cover. With a warming planet and rising insurance claims, every country now has regions that are becoming unprofitable. Not just Tuvalu, Angola and Bangladesh, which have long been in this category, but also Australia, Spain and Italy. In France, the government has become so concerned that it set up an assessment commission, which has just concluded that ‘financial rebalancing’ and ‘enhanced preventative efforts’ are called for – meaning higher premiums, state aid and parking your car under cover in a hailstorm.
According to their bosses, insurance companies play a sort of pathfinder role. By turning their backs on high-risk areas and presenting the bill for the true cost of natural disasters, they help raise awareness. Without adequate cover, they argue, people will leave dangerous places and that over time will create a social geography adapted to climate change.
But that’s not how things work in the real world. Even when dropped by insurance companies, at-risk areas still have growing populations. In France, nothing gets in the way of sun-worship in the south, and droughts and storms haven’t made people abandon the landscapes of the Atlantic coast. In the US, the population is rising in Georgia, North Carolina and Texas. And retirees still flock to Florida, which tops the league table for home insurance costs at an average of $6,000 per year. Nor have exorbitant premiums and fire risks prevented homes proliferating near North American forests, especially since the Covid pandemic revealed to executives the charms of remote working amid nature.1 The wealthiest won’t give up their freedom of choice and the poorest have to live with their lack of it. If no one wants to cover them, they don’t move; they do without insurance.
Six million US homeowners are in this situation today, stuck in a home that is effectively worthless because uninsurable. A minor accident could make them unable to repay their debts, plunge them into bankruptcy – and trigger a domino effect in the banking and real estate world. To avoid a generalised crisis, the public authorities are putting their hands in their pockets. Louisiana subsidises insurance companies so they’ll continue to provide cover there; in Florida a state-mandated nonprofit corporation now has three times the number of applicants it had in 2019. The only ones taking no risks are the insurers • Benoît Bréville is president and editorial director of Le Monde diplomatique
1 Renée Cho, ‘With climate impacts growing, insurance companies face big challenges’, Columbia Climate School, 3 November 2022, www.news.climate.columbia.edu
Le Monde diplomatique Board of directors Benoît Bréville, president & publication director; Anne-Cécile Robert, deputy director; Vincent Caron, Élodie Couratier, Pierre Rimbert | Editorial team Benoît Bréville, director; Akram Belkaïd, editor in chief; Philippe Descamps, Renaud Lambert, Évelyne Pieiller, Hélène Richard, Pierre Rimbert, Anne-Cécile Robert, Grégory Rzepski | Website Guillaume Barou | London Wendy Kristianasen, editorial director | Editorial and translation Charles Goulden, Veronica Horwell, George Miller, Jeremy Sorkin | Website Lucie Elven | Design The letter g Editorial and general enquiries 1 avenue Stephen-Pichon, 75013 Paris, France | Telephone +33 (0)15394 9601 | email english@mondediplo.com
Subscription enquiries Telephone +44 (0)1293 312195 | email subs@mondediplo.com Website www.mondediplo.com Commission Paritaire des Publications et Agences de Presse, Paris, no 0624 d 93422 ISSN no 1478-6591 © 1997-2024 Le Monde diplomatique | Printed by Sharman & Company Ltd, Newark Road, Peterborough PE1 5TD
Correction In our April issue, in the article ‘Russia: the lessons of history’, Mikhail Gorbachev’s acceptance of Germany’s reunification and admission to NATO was not in return for verbal guarantees that NATO would not expand eastwards, but was written into the Two Plus Four Agreement of September 1990
After some of the tensest days in the Middle East since the start of the Gaza war last October, Iran and Israel both finally opted to trade blows, but avoid- ed inflicting significant damage, concluding a series of tit-for-tat exchanges that for several days threatened to escalate into a high-intensity regional conflict. The three-stage sequence began on 1 April with Israel bombing Iran’s consulate in Damascus. This attack killed several Revolutionary Guards who were providing military and logistical support for Tehran’s regional allies.
If the fake Zionist regime wants to use the threat of attacking the nuclear centres of our country as a tool, reconsidering the policies of the Islamic Republic of Iran would be imaginable. Our fingers are on the trigger General Ahmad Haghtalab
Then, on the night of 13-14 April, Iran launched Operation True Promise, a volley of 300 drones and missiles, most of which were intercepted by Israeli anti-air defences with back-up from the US, France and the UK. Though Israel and the West portrayed this counterattack as a complete failure, Iranian diplomats gave the US, and consequently Israel, several hours’ forewarning. The operation did not target any urban or economic centres, signalling Iran’s wish to avoid civilian casualties. An Iranian statement said that ‘the matter can be deemed concluded.’
But the world anxiously awaited ‘the counter-response to the counter-response to the attack’, as an Al Jazeera commentator put it on 16 April. It came on Friday 18 April, with a dawn strike by Israeli drones on an airbase near Isfahan. This highly symbolic attack targeted the province where the Natanz nuclear facility is located, a key part of Iran’s uranium enrichment programme: it inflicted minimal material damage. ‘A de-escalatory response,’ suggested Guillaume Ancel,1 a writer and former member of the French military. But that’s unlikely to be the end of it.
The Israeli military, which has gone to war with its neighbours seven times since 1948, most recently in Lebanon in 2006, is on the brink of an eighth conflict, this time with Iran. The prelude to this impending confrontation began in the late 2000s with the assassination of several Iranian scientists involved in their country’s nuclear programme, and of Pasdaran deployed in Syria and Lebanon supporting Bashar al-Assad’s regime and the armed branch of Hizbullah respectively. As the events of April showed, this low-intensity confrontation could at any moment run out of control and set ablaze the Middle East and beyond.
Delineating this conflict involves showing how the ongoing war in Gaza could encourage Israeli prime minister Binyamin Netanyahu to intensify hostilities with Iran and risk a wider conflict. This would be completely antithetical to the wishes of the US, which desperately wants to maintain the status quo between these two regional powers.
Israel has responded to the killings (1,160 dead and 7,500 wounded) and kidnapping of 253 hostages (of whom 133 are still living) perpetrated in Hamas’s Operation Al-Aqsa Flood on 7 October with systematic devastation. Over 70% of housing in the Gaza Strip has been destroyed.2 As of 22 April, according to a report by its health ministry, 34,000 Gazans had been killed and 7,500 injured, excluding the missing. Gaza’s civilian population is enduring a nightmare: bombarded night and day, sometimes with the help of AI systems,3 indiscriminately targeted by snipers and drones, forced to move south and crammed together at the Egyptian border, deprived of healthcare after the near-total destruction of hospitals and humanitarian aid by Israel’s blockade. At a press conference on 31 January, Michael Ryan, the World Health Organisation’s emergencies director, described the ‘massive catastrophe’ of a population ‘starving to death [and] being pushed to the brink’.
Palestine again the central question
In these circumstances, one of the major diplomatic consequences of the war is that the issue of Palestine has returned to centre stage. Western governments had largely lost sight of it since the Abraham accords were agreed in 2020 and Israel’s relations normalised with the United Arab Emirates (UA E ), Bahrain, Morocco and Sudan, with Saudi Arabia poised to join that list. The declaration of a Palestinian state had taken a back seat, in the absence of pressure from Arab states which had previously demanded the return of Palestinian lands as a condition of a peace agreement. The Gaza war has proved the hollowness of such thinking. True, none of the states which signed up to the Abraham accords has questioned their normalised relations with Israel, and although the Saudis have officially suspended discussions with Tel Aviv, this is only temporary, according to insiders close to Crown Prince Muhammad Bin Salman (MBS).4
But Israel now faces renewed global interest in the Palestinians’ future. Beyond the massive popular protests around the world against Israeli war crimes in Gaza (see Gaza war: politicians vs UK public, page 5), a bitter battle is being waged on the legal and diplomatic fronts. On 29 December South Africa, backed by many non-Western countries, initiated proceedings at the International Court of Justice (ICJ ), a UN institution, seeking a provisional order instructing Israel to protect Gazans. South Africa framed its action ‘within the broader context of Israel’s conduct towards Palestinians during its 75-year-long apartheid, its 56-year-long belligerent occupation of Palestinian territory and its 16-year-long blockade of Gaza’.
In under a month, the ICJ issued an order instructing Tel Aviv to take ‘all measures within its power’ to prevent any potentially genocidal act and to allow humanitarian access to the enclave. This order lays the groundwork for the possible prosecution of leading Israeli figures. In addition, on 19 April Israel’s Channel 12 reported fears among those same leaders that the International Criminal Court (ICC ) in the Hague might issue arrest warrants for Netanyahu and other political and military figures for breaches of international law in Gaza.