The cost of insuring Italy's residential buildings for earthquake under alternative models of seismic hazard

Almost two decades have passed since the publication of Italy’s official model of seismic risk (MPS04) by the National Institute of Geophysics and Volcanology (INGV). A proposed revision of the model (MPS19) is still waiting the official approval. Meanwhile, an alternative approach was recently proposed in the geo-physical literature (REASSESS) taking fully into account the soil characteristics. Moreover, in 2023 the INGV has officially updated its method of converting the earthquake’s physical measures into an evaluation of macro-seismic intensity. Using only publicly available data, we exploit these major advancements by applying this INGV’s new method to the three models of seismic risk. We then use the hazard probabilities to derive the complete insurance indicators that assess the cost of protecting all Italy’s housing units under different scenarios. The inclusion by REASSESS of soil effects produces a riskier picture of the vulnerability of Italy’s houses with respect to the MPS04 baseline model, whereas the results obtained with MPS19 are much less worrying. Overall, the price for insuring all the Italian houses against seismic risk under a certain level of mutuality appears to be sustainable for Italian household.