news
- The Italian government is introducing a law requiring companies to buy climate insurance to offset losses from natural hazards, with a €5 billion reinsurance fund to support the initiative.
- Climate change is having a significant impact on European businesses, with a 2024 study finding that affected firms have a 7.3% higher probability of exiting the market, and experiencing an average decline in revenues and employment of -4.9% and -2.2%, respectively.
- The insurance industry is struggling to cope with the increasing frequency and severity of extreme weather events, with a 75% insurance-protection gap in Europe and a growing risk of insurers abandoning riskiest areas to avoid profit shortfalls.
It will be a whole new business atmosphere in Italy starting on January 1, 2025. That’s because the federal government there will require every company to buy climate insurance as internal financial support to offset losses from floods, landslides, and other natural hazards.
The warnings about global warming in Italy have morphed from story to harsh reality, yet most Italian businesses — especially small and mid-sized ones — have no climate risk protection at all. The new law mandates that companies must buy coverage and insurers must write policies or face fines. The plan is backed by a €5 billion ($5.3 billion) reinsurance fund, set up by a state-controlled financial institution.
Italy faces severe threats from flooding. A 2024 study concludes that affected firms have a 7.3% higher probability of exiting the market. If they survive, in the three years after the calamity, firms experience an average decline in their revenues and employment of -4.9% and -2.2%, respectively. These impacts are greater for micro-small, younger, and low-tech firms.
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Read the full post at CleanTechnica.
