CAT NAT Insurance Policies: One Year On. Where Does the Italian Market Stand?

Just over one year after the introduction of the mandatory insurance requirement for catastrophic risks, the Italian CAT NAT insurance market has entered a new phase. The introduction of the requirement represented a significant step not only for the insurance system, but also for the relationship between businesses, intermediaries and insurers.

The first key finding emerging from the monitoring carried out by IVASS (the Italian insurance supervisory authority) concerns the uptake of CAT NAT coverage. As of the end of April 2026, approximately 700.000 CAT NAT policies were in force, against an estimated potential market of around 4,5 million businesses. This figure highlights the significant growth achieved by the market, while also showing that there remains considerable room for further penetration.The propensity to purchase coverage is also not uniform across different business sizes. Medium-sized and large companies show significantly higher levels of coverage, while penetration remains lower among small and medium-sized enterprises and, more generally, among smaller businesses. This difference may reflect the stronger risk management capabilities of larger companies, as well as the greater complexity and cost of risk assessment and transfer for smaller businesses.Compliance may also have been affected by the absence of a clear and direct penalty for failing to purchase the required insurance. Although the legislation provides for a link between insurance compliance and access to certain public contributions and incentives, the absence of an immediate sanction may have reduced the perceived urgency to comply, particularly among smaller businesses. From Compliance with the Requirement to Risk ManagementThe first year of implementation has shown that CAT NAT should not simply be regarded as an additional insurance requirement.The legislation introduced minimum coverage for events such as earthquakes, floods and landslides. However, the market has rapidly developed beyond these minimum requirements. Insurers have started offering additional benefits, coverage extensions and, in some cases, advance indemnity payments to address immediate needs following a catastrophic event.This highlights an important trend: CAT NAT insurance is progressively evolving from a simple compliance tool into a component of a broader property protection and business continuity programme. Pricing and Conditions: There Is No Single CAT NAT RateAnother key element highlighted by IVASS monitoring is the significant variability in premiums.Pricing depends on several factors, including the geographical location of the risk, the value and characteristics of the insured assets, policy terms, conditions and exclusions. For this reason, a comparison based solely on premium does not provide a proper assessment of the quality and actual breadth of the coverage.The consequence is clear: in the CAT NAT market, the ability to analyse policy wording and the overall structure of the coverage is at least as important as the price. Outstanding ChallengesOne year after the introduction of the requirement, however, there are still several areas in which the market will need to evolve.These include the correct determination of insured values, greater clarity around exclusions, and the management of the economic consequences of a catastrophic event. There is also a need to develop a stronger culture of prevention: insurance protection is, in fact, only one of the tools through which a business can strengthen its resilience. A New Phase for Businesses and BrokersThe first year has therefore enabled the Italian market to take an important step forward, but it can hardly be considered an end point.The real challenge over the coming years will be to transform the CAT NAT requirement into a broader risk management culture. For businesses, this means understanding that purchasing insurance is not simply about complying with a legal requirement, but about protecting productive capacity and business continuity.For intermediaries, and brokers in particular, this creates an advisory role that goes beyond simply obtaining a quotation: analysing geographical and property exposures, identifying appropriate insured values, ensuring that deductibles and sub-limits comply with statutory requirements, assessing coverage extensions, and developing a solution that is consistent with the company's risk profile.After the first year, therefore, the question is no longer simply: “Does the company have a CAT NAT policy?”. It becomes: “Is the policy it has purchased actually adequate for the risk it needs to transfer?”It is probably this shift from compliance to informed risk management that will shape the next phase in the evolution of the Italian CAT NAT insurance market.