The severe flooding event in Europe that particularly affected the Emilia-Romagna Region of Italy in May 2023 is now estimated to have resulted in approximately €377 million of insurance industry losses, according to PERILS.
PERILS estimate covers flooding that occurred in the Emilia-Romagna region of Italy during the period of 2nd to 22nd May 2023.
That’s a particularly lengthy event duration, but flood events can cause insurance claims to be filed weeks after the event occurs, so this is a good way to capture as many as possible, even if it falls outside of typical hours clauses used in the insurance and reinsurance industry.
The estimate for an industry loss of €377 million is based on reporting by Italian insurers and only covers the property line of business.
The total economic loss for the flood event is currently estimated by the Italian government to be close to EUR 9 billion, PERILS noted, with close to 50% attributable to damage to public infrastructure.
The region was hit by an extended period of low-pressure weather over much of Italy during May, which drove repeat periods of very heavy rains and flooding.
PERILS explained there were two main rain storms that triggered the floods, on 2nd May and then again on 16th and 17th May, when extreme rainfall with more than 200mm falling in 24 hours caused severe inundation and hundreds of landslides across several provinces of the Emilia-Romagna and the Marche regions.
Large cities including Bologna, Cesena, Forli, Faenza, Ravenna, and Rimini were impacted by mud-laden overflowing waterways and rain-induced flash flooding.
The persistent and stationary nature of the rain storms led to large local water accumulations, overwhelming the capacity of rivers and urban drainage systems.
Luzi Hitz, CEO of PERILS, commented, “Reports show that insurance penetration in Italy for flood is low, particularly for homeowners and small commercial risks, compared to larger commercial and industrial risks. However, trying to get a true sense of the protection gap that exists is challenging. In the case of the Emilia- Romagna Floods, infrastructure damage formed a substantial part of the overall economic loss – much larger than would be expected for a windstorm or severe convective storm event.
“Comparing the insured loss to the overall economic loss is therefore not an accurate means of establishing the protection gap as the state-retained infrastructure losses should be removed from the calculations to ascertain insurance penetration rates effectively.”