Template-Type: ReDIF-Paper 1.0
Author-Name: Angelo Baglioni
Author-X-Name-First: Angelo
Author-X-Name-Last: Baglioni
Author-Email: angelo.baglioni@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica
Author-Name: Michele Grillo
Author-X-Name-First: Michele
Author-X-Name-Last: Grillo
Author-Email: michele.grillo@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica
Title: Calamità naturali e assicurazione: elementi di analisi per una riforma
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).
Length: 29
Creation-Date: 2009-09
File-URL: http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/ief0089.pdf
File-Format: Application/pdf
File-Function: First version, 2009
Number: ief0089
Classification-JEL: G22, H44
Keywords: Insurance, Natural disasters, Public provision of services
Handle: RePEc:ctc:serie3:ief0089