Luigi Federico Signorini: Disaster risk financing - the role of insurance in new public-private partnerships

Speech by Mr Luigi Federico Signorini, Senior Deputy Governor of the Bank of Italy and President of the Insurance Supervisory Authority (IVASS), at the high level conference "Disaster risk financing: the role of insurance in new public-private partnerships", organised by ANIA, Rome, 20 September 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen,

Once again we are seeing dramatic images of floods, damages and losses. The images that we just saw in the walk-in video for this conference are surely older, but could have been taken yesterday. Our hearts and thoughts are with those that have been hit, not just this time but also in the previous months, some repeatedly. We must hope that human life has been spared this time, although I understand that as of this morning some are still missing.

This is another reminder of the seriousness of the climate issue. We cannot be in denial. The accelerating change in the Earth's climate has increased the frequency and intensity of river and coastal floods, landslides, droughts and forest fires worldwide. Europe, in particular, is warming quite fast; according to Copernicus (the European satellite monitoring system), the average temperature for European land in August 2024 was more than 1.5°C above the 1991-2020 average for the same month. In addition to climate-related events, other natural disasters such as earthquakes, tidal waves, volcanic eruptions and bradyseism can have a dramatic impact on the economy and society.

The issue of natural disasters and, more generally, catastrophe risks, once confined to scholars of the 'hard' sciences, such as physicists and biologists, has become an area of concern for economists, sociologists and lawyers as well. As a consequence, one sees among other things more and more attempts at measuring the economic impact of natural events in a reliable way. The 2023 European State of the Climate Report estimates the direct damage to property generated in 2023 by floods, inundations and fires (disregarding, that is, indirect effects) at more than €13 billion, and the human toll at 151 deaths. Over the past few years, there has also been a growing attention in international fora to natural disasters as a potential source of systemic financial stability risk.