Catastrophe loss data aggregator PERILS AG has placed its initial industry loss estimate for the floods in the Emilia-Romagna region of Italy during the period of 2 to 22 May 2023 at €377m.
According to PERILS, this estimate of the insurance loss is based on data collected from the majority of the Italian insurance market and covers the property line of business.
The Italian government has pegged the total economic loss for the event at close to €9bn, with close to 50% attributable to damage to public infrastructure.
“After an extended period of severe drought conditions, Italy experienced extensive rainfall throughout the entire month of May and into early June 2023,” PERILS explained.
The firm continued, “On 2 May and then again on 16 and 17 May, 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, namely Bologna, Cesena, Forli, Faenza, Ravenna, and Rimini were affected by mud-laden overflowing waterways and rain-induced flash flooding.
PERILS stated that the flooding was more severe during the second phase of 16 May onwards. 17 people lost their lives, two in the first phase of flooding and 15 in the second phase.
Expanding on the cause of the flooding, the catastrophe loss data aggregator wrote, “The flooding was fuelled by an extended period of low-pressure weather over much of Italy during May.
“The poor weather culminated in intense rainfall, first on 2 May with local precipitation of up to 200mm in 24 hours, and again on 16 and 17 May with up to 300mm in 48 hours.
“This rainfall was characterised by its persistent and stationary nature, leading to large local water accumulations which overwhelmed the capacity of rivers and urban drainage systems.
“In addition, the rain on 2 May fell on dried-out soil and the rain on 16 and 17 May fell on water-saturated ground, further aggravating flooding.”
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.”
An updated estimate of the market loss from the Emilia-Romagna Floods will be made available on 22 August 2023, three months after the event end date, PERILS has said.