By Marcello Condemi
A recent study conducted by the Bank of Italy (February 2024) highlights the serious lack of adequate insurance coverage in Italy in the event of catastrophic events. In fact, Italy, like (and perhaps even more than) other countries, is exposed to increasingly frequent and devastating natural events of various kinds, such as seismic and climatic events, which cause significant damage primarily to families and businesses (commercial and agricultural) and to all those directly affected, but also, albeit indirectly, to the entire community as they destroy the environment, with the consequent generation of collective charges aimed at supporting the heavy State aid usually provided. Hence the need to stipulate, in primis by companies, suitable insurance cover, by resorting to policies that require an estimate of the damage suffered or even to “parametric” insurance cover which, linked to certain parameters (e.g. the intensity of an earthquake above a pre-established level), makes it easier to measure the damaging effects suffered. However, despite the high risks, especially of climatic origin, Italian sensitivity and propensity to take out such policies is particularly low. In fact, recourse to non-life insurance, according to the latest data provided by IVASS in 2023 and relating to 2021, stands at 1.9% of the national GDP, well below the OECD average of 4.9%, and, in particular, based on OECD data relating to 2022, well below the 4.6, 3.9, 2.9 and 2.9% of France, Germany, Spain and the UK respectively. The consequence of this is that, according to EIOPA data, only 35% of losses from catastrophic events were covered by insurance in 2019. But what is the reason for this disaffection? The reasons are said to be low financial education, low disposable income, high expectations of supportive public interventions and distrust of insurance. But that's not all: the offer of mitigation of catastrophic events in Italy, in fact, according to IVASS data, is concentrated for 92% in the heads of the largest insurance groups; the statistical tradition is also very different with regard to seismic and climatic events, given that while the former have been measured and tracked for centuries, the latter have been so for barely two decades. Now, the evident harmfulness of catastrophic phenomena, often disastrous for households and businesses, as well as the strong reluctance to deal with them insurances, require urgent action to change the status quo; An initial, albeit partial, response to this need is the 2024 Budget Law (Law No 213/2023), which contains specific measures on catastrophic risks.
Published in the newspaper “Il Tempo” on 8 February 2024
