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Calamità naturali e assicurazione: elementi di analisi per una riforma

Author

Listed:
  • Angelo Baglioni

    () (Università Cattolica di Milano)

  • Michele Grillo

    () (Università Cattolica di Milano)

Abstract

Private insurance markets provide insufficient coverage for risks coming from natural disasters. We argue that in such markets the typical market failure is mainly due to reasons other than asymmetric information. More specifically, the low probability of a disaster, together with the height of the economic damage normally involved and the strong correlation among individual risks, together with individuals’ expectation of ex post social support, raise the insurers’ and lower the potential clients’ reservation price. Financial markets (through e.g. CAT bonds) can help, but only up to a point. Thus, the intervention of the public sector is needed. After analyzing the experience of some countries (USA, France, Spain, Switzerland), we propose a reform plan for Italy that avoids the discretionary ex post public intervention, allows an inter-temporal risk diversi fication, and avoids the waste of resources in risk selection – which is a typical feature of the private provision of insurance.

Suggested Citation

  • Angelo Baglioni & Michele Grillo, 2011. "Calamità naturali e assicurazione: elementi di analisi per una riforma," Rivista di Politica Economica, SIPI Spa, issue 1, pages 89-120, January-M.
  • Handle: RePEc:rpo:ripoec:y:2011:i:1:p:89-120
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    Cited by:

    1. Sandro Brusco & Luca Colombo & Umberto Galmarini, 2010. "Local Governments Tax Autonomy, Lobbying, and Welfare," Department of Economics Working Papers 10-01, Stony Brook University, Department of Economics.
    2. Elisabetta Gualandri & Alessia Pedrazzoli & Paola Vezzani, 2015. "Finanziare la ricostruzione: attività e attori coinvolti nel sisma dell’Emilia Romagna," Department of Economics 0070, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    3. Giuseppe Mastromatteo, 2011. "H.P. Minsky And Policies To Countervail Crises," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0102, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    4. Giuseppe Mastromatteo, 2011. "The Debate on the Crisis: Recent Reappraisals of the Concept of Functional Finance," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0105, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

    More about this item

    Keywords

    insurance; natural disasters; public provision of services;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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