Governments in Italy and Greece are leaning on private insurance to absorb the mounting cost of extreme weather — a shift that could redefine how Europe pays for the consequences of climate change.
When Storm Daniel swept through central Greece in September 2023, Athina Balafa and her husband, Charalambos Laiopoulos, lost almost everything. The couple, farmers and business owners, watched helplessly as the water swallowed their home, their car, their crops, and the dietician’s office they had built together.
The floodwaters left much of Farkadona, their small farming town in Greece’s Thessaly region, under mud and debris. Two years later, the family of four is still living with relatives, trying to rebuild their lives from scratch.
Their only insurance policy covered their business, but not against natural disasters. Little help has come from the government, the couple told Solomon.
Across the Mediterranean, in Italy’s Emilia-Romagna region, the same story repeats. In Traversara, a small village of about 400 people in the province of Ravenna, the area hardest hit by floods – the “red zone” – still bears the scars of destruction. Wild grass towers over the doors of abandoned houses, their walls torn open, tree trunks still wedged in window grates. It’s a place frozen in time; the day the water swept life away.
In both countries, home and business owners are increasingly turning to private insurers — sometimes by choice, sometimes by law — to shoulder the rising cost of floods and other extreme weather. But as disasters grow more frequent, and premiums soar, protection itself is becoming a privilege.
In a joint investigation with Italy’s FADA Collective, we examined how Italy and Greece — two Mediterranean regions hit hardest by recent floods — are reshaping disaster recovery by pushing more responsibility onto private insurance. Through on-the-ground reporting and a survey of more than 370 residents and business owners in the two countries, we found that:
As governments scale back public compensation and extreme weather grows more frequent, insurance — long underused in parts of southern Europe — is becoming both more essential and more elusive.
No continent in the world is warming faster than Europe, and nowhere in Europe faster than the Mediterranean. The region is heating 20 percent faster than the global rate, and its average temperature has already risen 1.5 degrees Celsius above pre-industrial levels, fueling more frequent and intense heatwaves.
Between 2023 and 2024, the Mediterranean region was hit by some of the most destructive storms in its modern history, with floods sweeping through residential and agricultural areas in Italy, Greece, Spain, Libya, and beyond.
Storm Daniel, one of the deadliest cyclones ever recorded in the region, caused massive destruction in Thessaly, Greece’s agricultural heartland. The storm killed 17 people and wiped out hundreds of thousands of animals, a blow that rippled through Greece’s food supply chain. Conservative estimates put the financial losses at more than €2.5 billion.
That same year, in Italy’s Emilia-Romagna region, two floods struck within 20 days. It was the heaviest rainfall since 1961, more than three times the usual amount for that time of year. As a result, 23 rivers overflowed, triggering landslides and flash floods that left 17 dead and caused €8.8 billion in damage, according to national data.
Since 1980, weather-related events have caused an estimated €822 billion in economic losses in the European Union (EU) — nearly half from floods.
With Greece and northern Italy among the most vulnerable parts of the Mediterranean, and extreme weather growing more frequent and destructive, governments are being forced to reconsider what recovery looks like, and who should ultimately pay for it.
In the aftermath of the floods, leaders in Athens and Rome made one message clear: the state can no longer shoulder the cost of every disaster.
“The time when the state could step in and provide resources for everyone, forever, is over,” Italy’s Minister for Civil Protection, Nello Musumeci, said at a 2024 conference of the National Association of Insurance Companies. Prevention, he added, “must also be the responsibility of every citizen.”
Days after the Thessaly floods, Greek Prime Minister Kyriakos Mitsotakis delivered a similar warning. “Private insurance for medium and large enterprises should be mandatory,” he said, adding that the country needed to “open up a public discussion about mandatory private insurance for all homes and businesses.”
Within a year, both countries had passed new laws.
On paper, the shift promises a more predictable recovery system: broader insurance coverage distributes risk and could reduce dependence on slow-moving disaster aid.
But in practice, the transition has exposed the limits of relying on private markets in regions where extreme weather is becoming the norm — and where insurers, wary of mounting losses, are increasingly hesitant to cover high-risk areas.
After the floods, many residents in Greece and Italy reassessed their exposure to climate risk, and their lack of protection.
To understand how recovery played out on the ground, we surveyed more than 370 residents and business owners in Thessaly and Emilia-Romagna. The survey showed clear shifts in how residents think about insurance.
In Thessaly, only about 11.5 percent of respondents had private insurance that covered natural disasters before Storm Daniel. Two years later, that share has nearly doubled: 20 percent now say they are insured against natural disasters, while another 26 percent are considering buying coverage.
In Emilia-Romagna, where catastrophic floods hit densely-populated areas, the shift was even sharper. Only 2 percent of respondents had natural-disaster insurance before the floods. Today, 26 percent do. Most said they purchased policies to ensure timely compensation the next time disaster strikes — a need made clear by the survey and by residents’ accounts of slow or insufficient public aid.
Yet even in areas where coverage is available, long-standing habits shape how people prepare — or don’t. In Greece, where insurance penetration remains well below the European average, industry representatives say the country must foster a broader “culture” of insurance if protection is to take hold among citizens and businesses, as the Hellenic Association of Insurance Companies (HAIC) notes.
And still, rising interest in coverage does not always align with the priorities of the insurance market. In Farkadona, Athina Balafa said she and her husband tried to insure their business six months after Storm Daniel, but an insurer told them the area was still considered to be in a “state of emergency.”
She said the insurer contacted them more than a year later to say they could now insure both their business and their home. But the couple ultimately decided not to buy the policy. The premium was reasonable, Balafa said, but the contract did not explicitly state that flood damage was covered.
Their experience is not unique. Two insurers working in the region confirmed that, for nearly a year after the flood, some companies temporarily restricted entire postal codes, leaving residents unable to secure insurance. One insurer said that, in certain cases, coverage remains unavailable for certain risks, such as subsidence — ground sinking that can follow major floods.
Kostas Karatzoulis, an insurance agent in Farkadona, said interest has surged since the storm — his clientele is up 25 to 30 percent, he estimates — but approvals have grown harder, and the process requires far more thorough checks.
“It’s not that easy to get insurance these days,” Karatzoulis said. Insurers, he added, have tightened their criteria: where companies once routinely insured houses built near rivers, they now subject such properties to more detailed checks and, in some cases, decline applications altogether.
In northern Italy, the pattern echoes Greece. In Sant’Agata sul Santerno, a town heavily flooded in 2023, insurance agent and resident Massimo Tarozzi said the few companies that still offer flood coverage are “struggling.”
“Most [companies] no longer offer such policies in certain zones because the risk is considered too high,” Tarozzi said.
Tarozzi admitted he hesitates to sell flood policies for homes in the hardest-hit areas, noting that repeated disasters sharply increase the risk of future claims. In places that have flooded more than once, he added, it can be difficult for insurers to distinguish new damage from older losses, a complication that can limit coverage, or make companies reluctant to offer it at all.
But the companies’ reluctance to insure in the face of growing climate risks is not the only obstacle for those seeking coverage.
Reclaim Finance, an NGO conducting research on finance and climate, said that there is a predictable pattern at play: people tend to seek coverage after a loss. But those who have already suffered damage “face higher premiums than other clients who have not yet suffered such losses.”
In Italy, rising premiums are becoming a major challenge, especially for businesses now legally required to take out natural-catastrophes insurance, as it’s classified there. The coverage includes earthquakes, floods, inundations, and landslides.
Mattia Lucatini knows this firsthand. He directs Artistation, a music and arts school in Faenza, a city of about 60,000 people in the province of Ravenna. Walking through the school’s freshly reconstructed halls, he explained that the school has been forced to rebuild twice in less than two years, after being hit by three floods between May 2023 and September 2024.
“The first time we lost everything, at least €500,000 in damages,” he said. All their musical instruments were inside and were destroyed in the flood. By October 2024, the school had finally been rebuilt and was preparing to reopen. But just days before the inauguration, another flood swept through.
When the first of the two May 2023 floods struck, Artistation was covered by a natural-catastrophe insurance policy, but only 40 percent of its losses were reimbursed, in line with the terms of the policy. Lucatini renewed the policy shortly before the third flood in September 2024, allowing him to claim compensation for three events — two floods in May 2023 and one in September 2024.
By the next renewal, however, the school’s insurer, Unipol, refused to extend the coverage, citing the high risk. “Luckily, I found another company willing to insure us,” he said. “This one covers up to 85 percent of the damages, but the price has changed dramatically. What used to cost a few hundred euros a year has now risen to a few thousand.”
Unipol declined to go into detail about its approach to natural-catastrophe coverage or how Italy’s new insurance mandate would affect the company. “At the moment, there is no one available to discuss the topics you mentioned,” the company wrote in an emailed response.
A June 2024 report by Italy’s Insurance Supervisory Authority (IVASS) analyzing 46 standard natural-catastrophe policies stressed the need to simplify products and procedures to ensure that businesses can comply with the country’s new mandatory-insurance law. The issue is far from abstract: many residents affected by the 2023 and 2024 floods in Emilia-Romagna describe a deep mistrust of insurers, fearing they might be misled or discover, at the moment of claiming compensation, some fine-print loophole that would allow companies to avoid paying out.
For now, neither Greece nor Italy has introduced government-mandated premium caps, measures that could limit price spikes. Such rules would be at odds with EU free-market principles, which prevent national governments from setting fixed rates, said Pietro Negri, secretary general of the Italian Association of Insurance Brokers (AIBA).
The pressures felt by residents in Greece and Italy reflect deeper shifts in both countries’ insurance markets. In recent years, payouts for natural-catastrophe damages have risen sharply.
In Italy, insurers paid out an average of between €1.5 billion and €2 billion annually between 2018 and 2022. In 2023, that figure surged to over €7 billion, driven by a cluster of severe storms and floods that struck densely-populated and heavily-insured areas.
With natural disaster coverage now mandatory for all Italian businesses — and compliance timelines varying by company size — the total insured value is expected to rise to €2.2 trillion. On average, insurers are expected to face annual claims of around €1.2 billion, but in the event of an extreme catastrophe, losses could reach as high as €12 billion, according to their own estimates.
Greece has also seen a steady escalation. Since 2015, private insurance companies have paid out more than €720 million for natural-disaster damages, 72 percent of it linked to storms. Storm Daniel alone generated more than €370 million in claims — one of the most expensive weather events in the country’s recent history.
At the same time, the insurance market in both countries appears to be expanding. In Greece, insurance companies’ total assets and liabilities grew 36.6 percent between 2016 and 2025, while non-life insurance contracts increased 9.4 percent.
Between 2023 and 2024, In Italy, premium collection grew by 7.5 percent in 2024. IVASS, the national insurance regulator, reports that total premiums across the sector continue to grow.
Taken together, the numbers capture a broader contradiction at the heart of southern Europe’s climate-risk landscape: even as the industry expands, the financial toll of climate change is climbing much faster than the region’s insurance capacity, leaving citizens facing escalating risks with fewer tools to meet them.
As climate risks intensify, European regulators say insurers cannot simply retreat from the areas most likely to be hit. The European Insurance and Occupational Pensions Authority (EIOPA) said that withdrawing from high-risk regions would undermine the industry’s purpose, “negating their very existence and their very relevance.”
“It would be easy for some of them to move away from risky areas, but in the end, that is not in the interest of the sector itself, because then they would get less and less relevant,” said Marie Scholer, a policy expert at EIOPA.
Industry experts argue that broader participation in insurance markets could help stabilize the system. Pietro Negri, of AIBA, the Italian association of insurance brokers, said that the more people are insured, the more effectively companies can spread losses over time. If insurers can count on wide uptake, he said, they can smooth out risk peaks and keep premiums more predictable — creating what he described as a “virtuous cycle.”
But that cycle depends on something more basic: the existence of real flood defenses.
A representative of HAIC, the Greek Association of Insurance Companies, noted that the more comprehensive and resilient a country’s disaster-protection measures are, the easier it becomes for households and businesses to access insurance, making coverage more affordable and effective.
In Thessaly, the floodwaters didn’t just break embankments, residents said. They exposed a state that had failed to prepare.
Under EU law, Greece was required to update its flood-risk plan by December 2021. Instead, the revision arrived nearly four years late — only after the country was condemned by the EU Court of Justice for failing to submit within the deadline.
The plan, completed in summer 2025, confirms what residents already know: embankments are inadequate, flood-protection works are fragmented, and most of the measures first proposed in 2015 remain unfinished. The Greek Ministry of Environment and Energy said the delay stemmed in part from the need to update data and methodology after the major wildfires and severe floods of 2023.
That failure now reaches into the private insurance market. “If something like this happens again,” said Greek insurance agent Andreas Georgantas, “we’re in the same position as before.”
Across southern Europe, governments are urging citizens to insure themselves against climate risk. But in places where the promised protections never materialize, whether in Thessaly or Emilia-Romagna, neither the states nor the market is offering real security, residents said. The floods may have subsided — for now. The underlying risk has not.
Italy’s Ministry for Civil Protection and Sea Policies did not respond to a request for comment. Greece’s Ministry for Climate Crisis and Civil Protection did not answer detailed questions before publication.
This crossborder investigation was supported by Journalismfund Europe.
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