Calamità naturali e assicurazione: elementi di analisi per una riforma

Private insurance markets provide insufficient coverage for risks coming from natural disasters. We argue that in such markets the typical market failure is mainly due to reasons other than asymmetric information. More specifically, the low probability of a disaster, together with the height of the economic damage normally involved and the strong correlation among individual risks, together with individuals’ expectation of ex post social support, raise the insurers’ and lower the potential clients’ reservation price. Financial markets (through e.g. CAT bonds) can help, but only up to a point. Thus, the intervention of the public sector is needed. After analyzing the experience of some countries (USA, France, Spain, Switzerland), we propose a reform plan for Italy that avoids the discretionary ex post public intervention, allows an inter-temporal risk diversi fication, and avoids the waste of resources in risk selection — which is a typical feature of the private provision of insurance.