A pact between man and land against natural events

Around $280 billion in losses by 2023 and a bill for the insurance industry of $108 billion. These are the numbers calculated by Swiss Re regarding the impact of natural catastrophes worldwide last year. Numbers that are steadily rising and are now considered almost structural by experts. So much so that research by Harvard and Northwestern University has revealed that an increase of one degree in the earth's temperature will lead to 12% of the world's GDP being left by the wayside (hitherto thought to be 1%-3%), over 12 trillion, and if no decisive action is taken, there is a risk of 31% of global welfare being lost. All this was discussed at the Trento Festival of Economics during the event 'Climate Change, Catastrophic Risks and Insurance' attended by Francesco Paolo Figliuolo, Covi Commander, Alessandro Molinari, CEO and General Manager of Itas Mutua and Maria Chiara Zaganelli, General Manager of Ismea.

He also put on the table the alarm launched shortly before at the Trento Festival by Piero Cipollone, a member of the ECB executive board: 'Climate change is accelerating; it has important implications for central banks because it affects inflation and exposure to supply shocks, reducing potential output and productivity growth. It also generates financial risks for central banks' balance sheets'.

And how to respond to this scenario of such a strong impact? "With a new pact between men and territories," began General Figliuolo. Indispensable to counter the phenomena affecting a fragile country where 'the soil has been excessively consumed by cementification'. This is why we now need an approach that is 'above all predictive', i.e. 'focused mainly on prevention'. And in this perspective, General Figliuolo, also extraordinary commissioner for the reconstruction of Emilia Romagna, Marche and Tuscany, continued, "not only structural intervention measures but also measures for governing the territory". Such as the 'mother plan, the one for hydrogeological instability'.

And on the other hand it is precisely flooding, due to heavy rainfall, and all that follows from it that is a priority for the country, which can also be seen in the figures presented by Molinari of Itas: "In 2023 Italy will have incurred 20 billion dollars in losses, 6.4 billion of which will be borne by the insurance system". With a situation, however, that is 'very uneven in terms of coverage: in Trentino Alto Adige, the figure is 90-95% for both companies and farms'. While in other areas of the country the situation is quite different. The picture will change with the compulsory cat-nat policy that will come into effect at the end of the year. In this regard, Molinari appealed to the government to 'publish the implementing decrees in good time' so that companies can get organised. And also for companies to equip themselves. Because the entire panel agreed on one point: if zero risk does not exist, it must at least be mitigated and managed. But for this to happen, the culture of risk management must be spread.

"This is also a necessity for the agricultural sector," emphasised Zaganelli, who in view of climate change must be "involved with a paradigm shift" that takes into account both "a sustainable model" and a "technological approach". More generally, the sector 'needs to be involved in climate change' so that 'agriculture can play a leading role'. And in this regard, with a view to transition, a greater share of funding should be reserved for the sector, which today represents just '4% of the total'. Otherwise 'there is a risk of missing the decarbonisation targets'.