Italy: Financial Sector Assessment Program-Technical Note on Climate Physical Risk Analysis

Italy is highly exposed to climate‑related physical risks, particularly floods. This reflects its geographic location, hydro‑morphological characteristics, and high concentration of economic activity and population in flood‑prone areas. Floods are among the most frequent and damaging natural hazards affecting the country. Climate change is increasing the frequency of intense precipitation events, and consequently the occurrence and intensity of floods. At the same time, Italy has one of the largest natural catastrophe (NatCat) insurance protection gaps in Europe, leaving households, firms, and public finances exposed to uninsured losses and increasing reliance on post‑disaster government support.