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

Catastrophic (CAT) weather events are rare and impactful, yet still poorly considered in ex-ante risk management policy interventions. The subsidised crop insurance schemes are not an exception. We study the Italian subsidised crop insurance market and its dynamics vis-à-vis CAT events, including flood, drought, and frost. This knowledge will help designing CAT-related policy interventions. The Italian case study stands out to draw policy recommendations for the EU vision on risk management. We find that insurance uptake is correlated with the occurrence of CAT events. The responsiveness is higher when coverage is predominant, yet the marked differences call for a deeper dive into the mechanics of CAT insurance schemes.