Risks and opportunities for insurers

From the studies carried out, we know that the main and the most immediate risk area can already be observed and constitutes the greater frequency and impact of catastrophic events, such as storms and floods. For insurers, who traditionally offer protection for this type of risk, this means an increase in the cost of claims and relative reinsurance - in both the life and non-life segments - and an inevitable increase in premiums as a consequence.

This increase in risk corresponds to an increase in insurance requests, driven by a greater need to feel protected, and this translates into an opportunity to develop and expand the insurance business. However, it is important to remember that insurance companies have to respond to the growing demand for coverage, adapting their offers in order to safeguard an adequate technical management, preventing adverse risk selection, i.e. the concentration of risk in the most exposed areas, to avert the risk of uninsurability.

To exploit the business growth opportunities connected with the coverage of damage caused by natural disasters it is also necessary for insurers to introduce suitable mitigation and prevention measures that reduce the costs of the events and increase the resilience of the economic and social fabric as regards such catastrophes, making it possible to guarantee the insurability of the risk.

On the basis of these premises, there must be reward mechanisms for positive behaviour in terms of risk protection and greater resilience, and penalties for situations in which regulations and minimum standards are not respected which push the market to carry out actions involving the standardisation or strengthening of the most vulnerable properties and which discourage the inhabitation of high-risk areas.

Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328