The Horizon Europe project PIISA, which tested new insurance approaches to promote prevention and resilience, has come to an end.
After three years of activity, PIISA - Piloting Innovative Insurance Solutions for Adaptation, a Horizon Europe Project that explored the role of insurance as both a risk transfer tool and a potential lever to incentivize adaptive behavior and measures, has come to an end. Through pilot activities, parametric products, risk indices and the integration of new data sources, the project tested new approaches to making climate risk measurable and insurable.
Funded under the European Mission on Climate Change Adaptation and coordinated by the Finnish Meteorological Institute, PIISA involved 12 partners from five countries and developed pilot activities in agriculture, forestry, urban areas, and citizens' wellbeing.
The Department of Management, Economics and Industrial Engineering, Politecnico di Milano, led by Prof. Laura Grassi as scientific lead and the researcher Luca Carrai as part of the research team, contributed to the project by analyzing citizens' and farmers' awareness of climate risks, as well as their willingness to take out insurance and adopt adaptation measures. Over 1,500 European citizens and Italian farmers were surveyed, and the results were complemented by discussions with some of the leading players in the Italian insurance sector.
The results of the surveys show that protection decisions depend not only on the perception of the threat, but also on the perceived ability to cope with it. In particular, a higher propensity to take out insurance emerges among those who have already experienced a climate-related event. Alongside these factors, financial literacy, income and the ownership of an asset exposed to risk are confirmed as relevant enabling conditions, while limited awareness of the available instruments represents one of the barriers to the adoption of new insurance solutions.
This topic was explored further through a workshop organized with Confagricoltura Bari–BAT, involving 35 participants including farmers, agricultural entrepreneurs, and sector experts. The discussion on parametric insurance, in which compensation is linked to predefined parameters and thresholds, emphasized the importance of transparency and user involvement. Therefore, insurance innovation requires not only the development of new products, but also conditions that facilitate their understanding and use.
Another line of research examined the potential contribution of the insurance sector to the adoption of nature-based solutions, particularly green roofs. The Politecnico di Milano conducted interviews with eight leading Italian insurance companies, accounting for around 45 per cent of gross premiums, to identify the main barriers and enabling factors for the adoption of these solutions. This work was accompanied by a workshop involving eleven stakeholders from the insurance and banking sectors.
Discussions with the insurance companies revealed that, alongside the traditional transfer of risk, the sector is considering the need to act on risk mitigation through adaptation measures. From this perspective, nature-based solutions, including green roofs, may represent an opportunity to reduce climate risks. However, the integration of these solutions into insurance products and models is currently limited by a lack of data and information. Reliable quantitative evidence is needed to measure the extent to which nature-based solutions can actually reduce the risks on which insurance cover is based.
The PIISA results demonstrate how innovation in the insurance sector can contribute to climate adaptation not only by providing protection against the economic consequences of extreme events, but also by encouraging behavior and measures aimed at prevention and risk reduction. Some of the areas in which the work initiated by the project should be continued include raising awareness, making data available, and encouraging collaboration between the research community, the insurance sector, and those exposed to risks. For these approaches to translate into widely available insurance solutions, further quantitative evidence is needed to reliably measure the extent to which adaptation measures actually reduce risk.