Insurance companies are satisfied with the government’s maneuver, that’s why
What does the government's budget plan provide for insurance? News and insights
Businesses will have to protect themselves against natural disasters under penalty of paying fines. The obligation is foreseen in the draft maneuver for 2024 approved by the Council of Ministers. The importance of taking out such policies, both for homes and for businesses, also due to the risks linked to climate change, has been highlighted several times in recent years by Ania, the association of insurance companies chaired by Maria Bianca Farina (in the photo).
WHAT'S IN MANEUVER
Among the innovations contained in the draft of the maneuver, as mentioned, there is the obligation for companies to take out catastrophe policies by the end of 2024. If this is not done, the sanctions range from a minimum of 200 thousand euros up to a maximum of 1 million. As Il Sole 24 Ore notes, this is a "real innovation" in our country and also an "almost inevitable step" to lower the cost of premiums because the more people pay, the more the cost of the policy will be lowered. The law also provides for the intervention of Sace, called to counter-guarantee the companies, with coverage of up to 50% of the compensation and for an amount "not exceeding 5 billion euros for each of the years 2024, 2025 and 2026".
THE ALARM LAUNCHED BY ANIA
Maria Bianca Farina, the president of Ania, also spoke about the urgency of intervening with incentives for the subscription of policies against the risk of natural disasters during her report to the 2023 assembly, last July 4th. “Climate change is no longer simply a risk but a reality” he said , recalling the “tragic floods that hit Emilia-Romagna a few weeks ago: can anyone still take refuge behind the idea that it is just bad luck, that it is a coincidence , when climate change becomes more and more tangible every year and hydrogeological instability or land consumption become priorities to be addressed?”.
Farina continued: “With regards to the risks linked to climate change, the macroeconomic consequences that can derive from extreme weather events are increasingly evident. All authoritative international recommendations identify catastrophe insurance as a key tool for containing losses. It promotes rapid financing for reconstruction and incentivizes risk mitigation. These are – the president of Ania had specified – vital aspects for a country as exposed as ours: the cost of a catastrophe does not depend only on the severity of the initial damage, but also on how quickly the reconstruction can be completed. And here we Italians are certainly not at the forefront in Europe. If earthquakes are also included, the share of insured damages in Italy today does not exceed 14% of the total: it is by far the lowest figure among the main European countries".
Farina had then in some way indicated the path to take: "An ex ante public-private system must be defined that is based on the mutualisation of risks and guarantees rigorous attention to prevention, transparency in procedures, appropriate methods of financing the management of post-event emergencies and, above all, certain and reasonable times for compensation". On the occasion he then listed some key numbers: in Italy, out of 4.3 million micro-enterprises, only 5% had a policy against natural and climate risks; 55% of small businesses and 78% of large ones.
The Minister of Business and Made in Italy, Adolfo Urso, also spoke during the assembly, citing the Catastrophies bill signed by the Minister for Civil Protection Nello Musumeci. A rule was included in the provision to "make it certain for those who insure themselves against catastrophe risks that they will then obtain reimbursements within a reasonable time frame, i.e. immediately". And again, as reported by Radiocor: “We guarantee anyone who takes out insurance, whether families or businesses, that in the event of damage there will be an immediate response with advance resources of at least 30% so as to allow them to immediately get their business back in motion. company and to contribute to the economic recovery of the area without waiting for public resources which will then be available as in the case of Emilia Romagna".
SOME NUMBERS FROM INSURANCE COMPANIES
Shortly before, in September 2022, Ania had released a report dedicated to fires and natural disasters in homes. From the document we learn that as of 31 March 2022 there were just under 1.4 million policies on the market with the extension to natural disasters (same figure as in 2021 while there were 1.2 million in 2020, 826 thousand in 2019 and 440 thousand in 2016), obtained as sums of policies with coverage of earthquake risk only (579 thousand), flood risk only (275 thousand) and both disasters (496 thousand).
Compared to March 2020, the policies that only cover earthquake risk had decreased by 12.5% in favor of those that had coverage for both flood and earthquake risks (+57.8%) and those with coverage of flood risk alone had increased by 18%.
It was noted that, to encourage the spread of insurance policies against natural disasters (earthquakes and floods), law 205/2017 had provided for tax breaks from 2018 for those who took out these covers for their homes. These benefits, moreover, were producing positive effects, "even if the result, overall, is still very limited".
Summing up, and based on the data available, it was possible to estimate, at a national level, that the sums insured for the earthquake risk alone were equal to approximately 198 billion, those for the flood risk alone were 56 billion and those with both catastrophe coverage was close to 140 billion for a total of around 393 billion (it was 487 in 2021, 397 billion in 2020, 275 in 2019 and only 175 in 2016). Furthermore, it emerged that the average premium (excluding taxes) of the fire guarantee for the 11.9 million policies detected was equal to 167 euros. As regards the extension of the guarantee to natural disasters, the average premium (excluding taxes) for the approximately 1.4 million policies that insure only for earthquake risk or for flood risk only or for both risks combined , was equal to 142 euros.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/assicurazioni-manovra-bilancio/ on Wed, 25 Oct 2023 10:01:42 +0000.