Dr. Anselm Smolka

Subsidence – When the ground sinks

Special topic: Earth – When the forces of nature become a danger

It announces itself with jamming doors and windows, or diagonal cracks in buildings. We are talking about a kind of ground settlement that occurs above all in areas where clay soils predominate and in England is known as "subsidence". In southern England and France, this natural hazard has cost insurers a great deal of money in recent decades. For these soils can shift and sink by different amounts.

The ground can subside or collapse for various reasons. On the one hand, when underground cavities form – as in karst areas. Here, carbonic acid in rainwater and groundwater dissolves the rock-forming mineral calcite out of the limestone bedrock, thus giving rise to cavities (also known as "sinkholes"¹), which may unexpectedly cave in under the weight of massive building developments or in some cases quite spontaneously. On the other hand, areas in which coal, oil, or gas is extracted or groundwater is removed from the ground may also subside.

Another cause of subsidence is that clay soils containing so-called swelling clays will shrink if there are prolonged dry periods. For insurers, this type of damage is a particularly big problem, as it mostly affects wide areas in which there is a concentration of values (buildings). The direct and very visible effects of subsidence arising from an area’s geology are cracks in buildings. Especially following dry summers, the accumulated losses can lie in the threedigit million range.

The ground sinks when water is removed

Why hot summers can have serious consequences becomes clear from the chemical composition of clays. One of the minerals they contain is montmorillonite, which can increase its volume tenfold when it absorbs water. As the weather is rather damp in England, for example, damage occurs there when water is abstracted: the ground shrinks and subsides. In predominantly dry areas, on the other hand, water causes the ground to swell – and then it lifts. Because of the usually smaller accumulation of values in such areas, however, the losses that can occur in such cases are far smaller than those that result from subsidence.

Losses of over €8bn

Subsidence damage arising from the local geology is typical of southern England. Subsidence was included in buildings insurance in 1971, at no extra premium charge, following pressure from lobbyists. The exceptionally dry summer of 1976 then brought insurers a rude awakening. It was initially interpreted as a hundred-year event, but the claims payments subsequently continued year after year. In 1991, the cost of claims peaked at €800m. All in all, since 1976, buildings insurers have paid out more than €8bn. Insurance companies in the UK responded by introducing premiums and deductibles that are dependent on the geographical location – with the result that highly exposed properties are hardly insurable any more.

In France, subsidence is insured through the state CatNat Pool. When this natural catastrophe insurance ("L’assurance des catastrophes naturelles") was first introduced, lack of claims experience meant that the risk was not properly rated. Claims for subsidence now account for a substantial proportion of the annual claims burden.

How can subsidence be avoided?

In most cases, subsidence in areas with clay soils only becomes dangerous when buildings are badly designed and executed. Damage can be prevented with foundations and cellars. In southern England and France, it is not usual to build cellars under buildings; as a result, subsidence is a big problem there. This is different from the situation in various regions of northern Germany where, despite similar geological conditions, such damage rarely occurs – here it is usual for houses to be built with cellars.

It is very costly to put buildings right afterwards. In England, the experience of the hot summer of 1976 led to changes in the building regulations, though these were only recommendatory in nature. Insurers there are also very heavily involved in loss prevention and give their customers advice. In France, they are thinking about limiting subsidence cover (within natural hazards insurance) because of the negative claims experience.

Drier summers – More frequent subsidence

Global warming and its regional characteristics will no doubt further aggravate the problem in the future, the main reason being that the probability of dry summers in mid-latitudes is increasing. Despite differences of opinion in individual cases, the risk of subsidence arising on account of an area’s geology can be assessed quite well on the whole. As a result, it is also possible to carry out targeted loss prevention. Munich Re supports insurers’ initiatives to raise their customers’ awareness of the risks and to advise them on ways of avoiding damage.

¹ Sinkholes – When the ground suddenly collapses, in: Schadenspiegel 3/2005 Special feature issue: Risk factor of water.