Catastrophic weather events and (subsidised) crop insurance markets. Evidence from Italy

Lamonaca, Emilia and Maccarone, Irene and Santeramo, Fabio Gaetano (2026): Catastrophic weather events and (subsidised) crop insurance markets. Evidence from Italy. Forthcoming in: Bio-based and Applied Economics (BAE)

Abstract

Catastrophic (CAT) weather events are rare and impactful, yet still poorly considered in ex-ante risk management policy interventions. Subsidised crop insurance schemes are not an exception, although the systemic nature of those risks has cascading effects that are reflected on the entire food systems and along the value chains. The Italian subsidised crop insurance market, and its dynamics vis-à-vis CAT events, including flood, drought, and frost, is an interesting case study. Insurance uptake and coverage increase after CAT shocks, signalling their value in strengthening farmers resilience to climate changes. The responsiveness is higher when coverage is predominant, with markedly heterogeneous patterns calling for deeper understanding of the trade-offs that are put in place by these policy instruments, central in the EU risk management strategy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Agriculture; Climatic risk; Extreme event; Risk management; Subsidised insurance.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q14 - Agricultural Finance; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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