12th July, Insurance

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While delivering the annual ANIA (National Association of Insurance Companies) report, its President, Mr. Fabio Cerchiai, described the effects the financial crisis has had on the Italian insurance sector. He stated that these were mainly indirect and due to reductions in the book value of stock and share investments. Although the companies that issued these investments were financially sound, they were heavily penalised by the economic downturn. Nevertheless management of the Italian insurance industry remained positive as insurance companies on the whole had faced up to the crisis better than their counterparts in other countries. Enterprise capitalization levels had never fallen below the safety limit, even taking into consideration the new assets and liabilities standards required by the Solvency II directive.  
According to Mr. Cerchiai, the Italian insurance market still has an ample growth margin. He went on to declare that the causes of the current gap are to be found mainly in a relatively widespread diffidence towards insurance companies and the fact that public welfare still covers a considerable area: in this way citizens have no incentive to invest their own resources in  protection offered by the insurance sector.
In 2008, direct premium collection slumped by 7.2%. This reduction occurred principally in branches of life insurance, whose premiums amounting to 54.6%, fell by 11.2% compared to 2007.
 

Life insurance

Direct premiums
(€ bn)

Quota
(%)

Variation
2008/2007 (%)

Traditional

31,4

56,6

+ 15,14

Linked

18,6

34,0

– 36,1

Capitalization

3,2

5,9

– 28,5

Other branches

1,4

2,5

+ 84,0

Total

54,6

100,0

– 11,2

 
As regards damage insurance, direct premium collection amounting to 37.5 bn euros fell by 0.5% compared to 2007.
 

Damage insurance

Direct premiums
(€ bn)

Quota
(%)

Variation
2008/2007 (%)

Vehicle and small craft

17,6

47,1

– 3,3

Accident and illness

5,4

14,3

+ 2,3

Property

5,1

13,6

+ 3,2

Transport

3,9

10,4

– 1,5

General

3,3

8,9

+ 1,8

Credit and caution

0,8

2,2

+ 1,4

Other branches

1,3

3,6

+ 8,8

Total

37,5

100,0

– 0,5

 
Moreover, Mr. Cerchiai indicated that in 2008 vehicle insurance – the main damage insurance sector – had shown alarming signs of difficulty with a reduction of 3.6% in the average price of tariffs. This, he said, was part of a 15-year trend that has led since 2004 to an overall decline of 8.3% in nominal terms and nearly 16% in real terms. In this context, a decisive role had been played by strong competition among insurance companies that resulted in the application of discounts on price lists.   
The last part of the report dealt with the effects of recent regulations for the distribution of insurance products. Mr. Cerchiai stated that although insurance brokers can now represent different companies, this provision has failed to produce appreciable effects on tariff levels, and the number of multi-mandatory agents has remained stable at 20% since the introduction of the Bersani Decree.  Fonte: Ania, http://www.ania.it/documenti/relaz_presidente/Relazione%20presidente%202009.pdf

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