The Italian Actuarial Climate Index: A National Implementation Within the Emerging European Framework

Barbara Rogo (), José Garrido and Stefano Demartis
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Barbara Rogo: Department of Statistical Sciences, Sapienza University of Rome, 00185 Rome, Italy
José Garrido: Department of Mathematics and Statistics, Concordia University, Montreal, QC H3G 1M8, Canada
Stefano Demartis: Department of Statistical Sciences, Sapienza University of Rome, 00185 Rome, Italy

Risks, 2025, vol. 13, issue 10, 1-53

Abstract: This paper presents the development of a high-resolution composite index to monitor and quantify climate-related risks across Italy. The country’s complex climatic variability, extensive coastline, and low insurance penetration highlight the urgent need for robust, locally calibrated tools to bridge the climate protection gap. Building on the methodological framework of existing actuarial climate indices, previously adapted for France and the Iberian Peninsula, the index integrates six standardised indicators capturing warm and cool temperature extremes, heavy precipitation intensity, dry spell duration, high wind frequency, and sea level change. It leverages hourly ERA5-Land reanalysis data and monthly sea level observations from tide gauges. Results show a clear upward trend in climate anomalies, with regional and seasonal differentiation. Among all components, sea level is most strongly correlated with the composite index, underscoring Italy’s vulnerability to marine-related risks. Comparative analysis with European indices confirms both the robustness and specificity of the Italian exposure profile, reinforcing the need for tailored risk metrics. The index can support innovative risk transfer mechanisms, including climate-related insurance, regulatory stress testing, and resilience planning. Combining scientific rigour with operational relevance, it offers a consistent, transparent, and policy-relevant tool for managing climate risk in Italy and contributing to harmonised European frameworks.

Keywords: climate-related risks; atmospheric indicators; sea level rise; spatial aggregation; climate anomalies; insurance protection gap; Italy (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2025
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