SACE to provide reinsurance backing for nat cat coverage in Italy

SACE, the Italian insurance and financial group wholly owned by the Italian Ministry of Economy and Finance, has announced that it will provide reinsurance at market conditions, covering indemnities of up to 50%, with a total cap set by the 2024 Budget Law at €5 billion for 2025.

For those unaware, the Italian government recently issued an interministerial decree in the Official Journal detailing new rules for mandatory insurance against natural disasters and catastrophic events.

The new Budget Law introduced this requirement for all companies with a registered office or permanent establishment in Italy, except for agricultural companies.

According to Moody’s Ratings analyst Louis Nonchez, this regulatory change will “significantly boost” premium income, especially from small businesses, who have historically not purchased natural catastrophe insurance.

Building on this, SACE stated that its guarantee aims to enhance the resilience of Italian companies to natural catastrophes while reducing the insurance gap.

Detailing the scope of its new guarantee, SACE said, “The guarantee is issued in favour of insurers and reinsurers licensed in Italy to insure natural catastrophe risks, providing coverage of up to 50% of the insurance indemnities that companies will pay to insured Italian companies upon the occurrence of natural catastrophe events covered by the insurance policy.”

SACE concluded, “The grounding of this new operation has been made possible thanks to the collaboration between various actors of the Country System who have contributed in factoring their respective competences to concretely meet the needs of enterprises, increasing their credit sustainability and determining an efficiency enhancement of the processes related to catastrophic events.”

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