Catastrophic Events in Italy: Insurance Coverage and State Intervention

1. Catastrophic Events in Italy: Insurance Coverageand State Intervention

2. Some statistical data: number of catastrophic events in the world from 1970 to 2008 [Enz e Schwarz (2009)]

3. Some statistical data: entity of damages

4. Possible reasons for damages increasing • Increasingofcatastrophicevents due toclimatechange • Default of preventive measures • Frauds in the processofdamageliquidation

5. Insurance and control of damages increasing In generalinsurancecoverages play a relevantrole in controlling the increasingofdamages: • Preventive measures are imposedby the insurerto the insured party; • Insurers take efficientdamageliquidationprocesses; • Through the mechanismofsubrogation, insurerscould take actionagainstresponsiblepersonsfordamages;

6. Obstacles and Challenges in Catastrophic Events Insurance Accidents costs: According to the estimations of Ania (the Association of Italian Insurers) the amount of annual damages for natural catastrophic events in Italy is likely to run into 2.852.525.404 euro per year

7. (Aniadatas: damagestorealestates in Italy)

8. The interplay between State and Insurers Ofcoursecatastrophicevents are insurable….but high damagescostsnecessarilymean high premiums. Opportunityof a State intervention withregardto premium payment. The solutionsadoptedbyItalianParliament

9. State intervention in agricultural insurance plans According to Act 29th march 2004, n. 102: every year the Italian Ministry of Agriculture provides an agricultural insurance plan. it provides State contribution in premium payment for those catastrophic events included in the annual plan on agricultural insurance. it escludes State intervention(provided in art. 5 Act 102/2004) for those catastrophic events included in the annual plan on agricultural insurance

10. AgriculturalInsurancePlan 2012 • Multirisk policies • Increasing of the number of events included in facilitated insurance coverages • Change of mentality with respect to catastrofic event + 11% sales

11. DL 59/2012 the Reform of Italian civil protection According to art. 2, the Government should have to define some instruments to facilitate insurance coverage of real estate in case of catastrophic events: Extension of present real estate coverages to catastrophic events Total (or partial) exclusion of State intervention Fiscal facilitations

12. The Law of conversion (L. 100/2012) Art. 2 DL 59/2012 has been cancelled by the law of conversion due to financing problems. Thinking to a solution…

13. Some proposals… • Insuring public finance against natural disasters (David Hoffman – Patricia Bruckoff, 2006) • The case of Hurricane Insurance. The state of Florida has found a solution to insure hurricane risks at reasonable premium levels with the creation of Citizens Property Insurance Corporation (an insurer of last resort) and the Florida Hurricane Catastrophe Fund (Mario Jametti- Thomas Von Ungern- Sternberg, 2009) • Public reinsurer (the proposal of Ania)

14. What’s new about Italian civil protection • Increasing of preventive measures, emergency management plans and communication; • Increasing of coordination acted by the department of civil protection with regard to public and private local institutions; • Regional plans and funds of civil protection towards a new role for local communities ?

15. Opportunitiesforinsurers … • Crisisofindemnification under public law. Increasingof interest forinsurancecoverage (notonlypropertyinsurance, butalsohealthinsurancerelatedtocatastrophicevent, costofanadequate first assistance).

16. Thanks for your attention