Calamità naturali e assicurazione: elementi di analisi per una riforma

Angelo Baglioni and Michele Grillo ()
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Michele Grillo: DISCE, Università Cattolica

No ief0089, DISCE - Quaderni dell'Istituto di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: 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 raise the insurers’ and lower the potential clients’ reservation price. The solution recently provided within the market (the CAT bonds) is interesting but unsatisfactory. Therefore 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 diversification, and avoids the waste of resources in risk selection (a typical feature of the private provision of insurance).

Keywords: Insurance; Natural disasters; Public provision of services (search for similar items in EconPapers)
JEL-codes: G22 H44 (search for similar items in EconPapers)
Pages: 29
Date: 2009-09
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (4)

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Journal Article: Calamità naturali e assicurazione: elementi di analisi per una riforma (2011)
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