'Small percentage' of properties damaged by Italy floods were insured: Verisk

Low take-up of flood insurance in areas impacted by the May flooding in Italy means only a small percentage of overall losses will be covered by the insurance market, according to a Verisk analysis.

Extreme event modelers at Verisk said two periods of excessive rainfall between May 1-3 and May 16-17 led to major flooding in parts of northeast Italy, particularly in Emilia-Romagna, one of the most flood-prone regions of the country. Historic peak river flows were spread across a broad swath the region, impacting the provinces of Bologna, Forlì-Cesena, Modena, Parma, Piacenza, Ravenna, Reggio Emilia, and Rimini.

For commercial and industrial lines of business, Verisk data indicates that approximately 45% of risks are covered for flooding. Residential flood insurance is sparse, resulting in “a major gap in protection” in many regions. The flood insurance take-up rate in the impacted area is somewhere between 1-3%.

Some areas experienced rainfall reflecting 1-in-100-year event levels as measured by the Verisk flood model for Italy. Recovery and cleanup efforts are still underway weeks after the flooding occurred in many areas, especially the hardest-hit regions.