Panetta urges climate insurance and adaptation to contain losses
Climate resilience requires better risk measurement, broader insurance and investment in adaptation, Banca d'Italia Governor Fabio Panetta said in Manila on October 19, 2026. Extreme weather caused more than $200 billion in direct damage in 2025.
Sharing losses before disasters strike
Opening the Green Swan Conference 2026, Panetta said direct weather-related damage in 2025 exceeded twice the level of the early 2000s.
Uninsured losses can disrupt production, trigger defaults and transmit stress to banks and public finances.
He advocated layered protection through private insurance, reinsurance, public backstops and catastrophe or disaster relief bonds.
Italy recently made flood, earthquake and landslide insurance compulsory for non-agricultural firms, supported by a public backstop.
The approach builds on a framework developed during Italy's 2024 G7 Presidency and reaffirmed under France's 2026 Presidency.
Coverage must remain affordable while pricing reflects risk and preserves incentives for prevention, he said.
Prevention competes with reconstruction
Panetta said localized hazards, data gaps and less reliable historical observations complicate risk pricing.
Banks must embed climate risks in governance and credit, market, operational and insurance risk management.
Central banks must fulfil existing mandates, not expand them.
Adaptation remains underfunded, especially where debt limits fiscal capacity.
He urged resilient infrastructure, credible policies and development-bank guarantees or blended finance to attract private capital.
Insurance cannot replace prevention
Panetta's message puts loss prevention alongside financial protection rather than treating insurance as a substitute for adaptation.
He said repeated reconstruction costs more than earlier investment in resilience.
His framework links better data, risk sharing and lower exposure, with distinct responsibilities for governments and central banks.