Flood Reality
In Italy

In Europe, Italy has the largest population living in flood-prone areas and has been affected by major flood events in 1994, 2000 and 2002.

Despite this, insurance penetration for flood remains low in comparison to other European countries and is currently estimated at less than 10%. 

This insurance penetration rate reflects reluctance to obtain insurance, due to high premiums and reliance on state relief, and potentially inadequate risk awareness.

The Flood Reality

New research conducted by JBA using our Italy River Flood probabilistic model suggests annual average loss (AAL) from flooding for residential buildings could be as high as €300 million. With less than 10% of that figure insured, an average of over €270 million of uninsured loss to residential buildings is estimated to occur in Italy each year.

Our research also suggests that 60% of the AAL to residential buildings is concentrated in just 5% of Italy's CRESTA zones. This is a common feature of developed countries and highlights the need to distribute exposure intelligently to avoid overexposure to natural perils.

For flooding, this is especially important due to the highly localised nature of the peril, with hazard varying between adjacent properties.

Consequently, our Italy model is underpinned by high resolution 10m hazard mapping and takes into account the spatial correlations in flood events in order to accurately model flood losses.

Pictured: Highlighted in orange - the 5% of high resolution CRESTAs that contribute to 60% of Italy's residential buildings’ AAL

In a market with significant potential for growth and with such a large population at risk, it will become increasingly important for insurers to understand their exposure to flooding.

If you would like to find out more about JBA's Italy River Flood probabilistic model, please contact us today.

References:
* European Environment Agency (2016) ' Floodplain management: reducing flood risks and restoring healthy ecosystems', http://www.eea.europa.eu/

* Gizzi, F.T., Potenza, M.R. & Zotta, C. (2016) 'The Insurance Market of Natural Hazards for Residential Properties in Italy', Open Journal of Earthquake Research, 5, 35-61

* Porrini, D. (2015) 'Risk Classification in Natural Catastrophe Insurance: The Case of Italy', International Journal of Financial Research, 7(1) 39-49

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cras laoreet erat a hendrerit molestie. Vestibulum sed ex eget arcu finibus volutpat in eget neque
Lorem ipsum dolor sit amet,

Do you like the sound of working with our team and supporting what we do? Check opportunities at JBA Risk Management.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Cras laoreet erat a hendrerit molestie. Vestibulum sed ex eget arcu finibus volutpat in eget neque

News &
Insights

Blog Flood Reality In Italy

In Europe, Italy has the largest population living in flood-prone areas and has been affected by major flood events in 1994, 2000 and 2002. Despite this, insurance penetration for flood remains low and is currently estimated at less than 10%.

Learn more
Blog Could Vietnam Be The Next Thailand?

In 2011, the insurance industry was left reeling as the flood waters around the banks of the Chao Phraya river basin, Thailand, finally ebbed away.

Continue reading
Blog Harvey and Irma: Five Lessons For The Insurance Industry

US flood risk is firmly under the spotlight as insurers, reinsurers, businesses and public officials come to terms with the devastating impact of hurricanes Harvey and Irma. We take a look at the lessons to learn here.

Continue reading
Blog Modelling the Unmodelled

Five years on from the 2011 Thailand flood event, insurers and reinsurers still haven't forgotten its devastating effects.

Continue reading