This is due to the majority of risks in the Italian insurance market not including coverage for floods.
The major flood events in Italy were triggered by two instances of excessive rainfall, occurring from May 1-3 and 16-17. These floods mainly affected the northeast region of Italy, particularly the Emilia-Romagna region.
Even a month later, the affected areas are still grappling with cleanup and recovery efforts. Verisk’s Flood Model for Italy indicates that nearly 20 out of approximately 70 river gauges observed in the region recorded water levels at a 100-year return period or higher.
The peak river flows, which reached historic levels, spanned across a wide area of Emilia-Romagna, impacting provinces such as Bologna, Forlì-Cesena, Modena, Parma, Piacenza, Ravenna, Reggio Emilia, and Rimini.
Furthermore, the floods caused over 400 landslides, including approximately 100 in Forli Cesena, 90 in Ravenna, 40 in Bologna, 25 in Modena, 15 in Reggio Emilia, and more than ten in Rimini.
Analysts note that the Emilia-Romagna region is one of the most flood-prone areas in Italy. However, Verisk’s report reveals that the majority of risks in the Italian insurance market do not provide coverage for floods.
“For commercial and industrial lines of business, Verisk data indicates that approximately 45% of risks are covered for flooding. The market for residential flood insurance in Italy is sparse, and as in many regions, there is a major gap in protection for these risks as they are not typically covered by standard policies,” stated the analysts.
They further added, “Due to the low adoption of flood insurance, it is likely that only a small percentage of the extensive residential damage caused by this event will be covered by the insurance market in relation to the overall insurable loss.”
