Building a Natural Hazard Insurance System (NHIS): The Long-lasting Italian Case

Abstract

The worrying growth of extreme natural events and their socioeconomic impact over time is increasingly fuelling the debate on how to manage disasters in view of developing resilient and sustainable societies. One possible financial tool may be represented by insurance against natural hazards, such as earthquakes, floods, and landslides. From this perspective, the current article considers legislative attempts to build a Natural Hazard Insurance System (NHIS) in Italy. The (never promulgated) bills proposed over a time span of about 30 years were analysed by: (a) A text-mining technique, considering the extraction of relevant data for the research; (b) the careful reading of the texts and their cross-correlated critical analysis. Approximately forty bills have been proposed since the 1980s and they mainly concern the proposal of an NHIS based on a certain degree of compulsoriness (the voluntary system is contemplated only on a subordinate basis). Two possible main hurdles to the promulgation of such laws were inferred: the insurance scheme to be adopted and the issue of illegal buildings. Furthermore, the item of natural hazard risk perception was a factor not adequately considered by the bills. Based on the critical scrutiny of the bills and taking advantage of international experiences, the establishment of a voluntary national scheme managed by a public authority with specific competences on NHIS is proposed.

Rewinding the Tape: Documentary Heritage to (Re)discover “Lost” Natural Hazards—Evidence and Inferences from Southern Italy

“…These data, once updated with respect to the change in construction techniques and materials compared to the nineteen-sixties, might help set disaster insurance rates. Indeed, after thirty years of attempts to legislate on the matter in Italy, the growth of extreme natural events and their socioeconomic impact over time is fuelling the debate on how to manage future disasters, paying attention again to the different insurance coverage systems [55][56][57].…”

Non-Incomes Risk Mitigation Mechanisms for Cultural Heritage: Role of Insurances Facing Covid-19 in the Italian Context

“…Insurance transactions related to sensitive customers expose insurance companies to several risks. In particular, in underwriting, these risks apply and are evident to many sectors of the non-life insurance business, particularly in the industrial and commercial insurance business [2].…”

“…In many countries around the world, including Italy, interest in a natural hazard insurance system [2] emerges from the search to find an efficient tool for compensating those insured who suffer losses, assessing the financial risk of uncertain losses, and ensuring faster and better rebuilding repair timeframe. In Italy, natural hazards, such as earthquakes, floods, and landslides, are responsible for annual losses equal to 0.2 % of the national gross domestic product.…”

“…On the other hand, there has been a slight growth trend of medium-large companies in the last decade, which have deemed it appropriately and coherently to take advantage of specific insurance policies over the years. According to Porrini, the cause of the lack of penetration of insurance policies in the context of individuals has to be found in the so-called disaster syndrome -stunned, shocked state common in the impact phase of disasters -due to the distortions on the demand side and insufficient supply of coping disaster resources [2].…”

Parametric Insurance—A Possible and Necessary Solution to Insure the Earthquake Risk of Romania

“…Raising their awareness should be performed through the broad involvement of citizens' associations and academic circles with expertise in the field, which would also lead to increasing the number of building owners who would purchase this type of product. The long term and difficulty of the regulatory process of earthquake risk management can be an additional source of delay in the implementation of an adequate protection system (Gizzi et al 2021).…”