“We are here, we are here again. And it is the best victory” – these were President Maria Bianca Farina’s opening words at the Ania (Italian Association of Insurance Companies) annual meeting held on July 15th. The assembly, titled ‘United for the restart’, was held in Rome, and represented a great opportunity to reflect on the state of the sector, as well as to analyze the challenges and opportunities it brings to the country in our current economic scenario, which is strongly characterized by the pandemic and still at the beginning of the recovery phase.
During the meeting, in addition to the direction of President Maria Bianca Farina, who presented the annual report, the Minister of Economic Development Giancarlo Giorgetti and Luigi Federico Signorini (President IVASS) also spoke. Then, Federico Fubini, journalist at the Corriere della Sera interviewed Joseph Stiglitz, Nobel Prize for Economics, and Lucrezia Reichlin, professor at the London Business School, on aspects related to the development of the Italian economy in the general framework of the global scenario.
I report below some key figures taken from the report presented by President Maria Bianca Farina on the state of the insurance industry at the end of 2020, which I believe are significant for our perspective:
• At the end of 2020 the insurance market decreased by 3.9% in premium income; in particular, non-life premiums fell by 2.3%, life premiums by 4.4%
•.In the life sector, premiums from linked policies grew in 2020 (+6.2%) and those from traditional products with guarantees decreased (-9.5%). Despite the pandemic crisis, the net cash flow in life insurance was largely positive in 2020, for both class I and class III, demonstrating that, despite declining premium income, savers’ confidence in the stability and security of insurance savings has not waned.
• In the non-life classes too, premium income fell, mainly due to the contraction in motor TPL premiums (-5.7%), mainly due to the reduction in the average premium, while premiums in the other non-life classes remained stable overall.
• In the last ten years, the average price of motor liability insurance has decreased by 35% – and in 2020 alone, Farina pointed out, the reduction in the overall cost of claims was 19.9%, against a decrease in premiums of around 6%.
Therefore, we can state that despite being inevitably hit by the crisis the insurance sector has managed to cope with the pandemic, confirming the value of its management and business models. Also, above all, it continued to support the economy, protect policyholders, safeguard their savings, and guarantee employment.
Regarding the present and the future challenges, Maria Bianca Farina shared a very clear and sharp point I agree with: “We want to stand by the government, the institutions and all the productive and social forces and bring our contribution to the recovery of the country, leveraging the cornerstones of our mission: savings, investments and protection against risks”.
This statement summarizes the association’s – and more generally insurers’ – commitment to bring a significant contribution to the Italian recovery and growth, cooperating with the public sector. This contribution was also acknowledged by Italian Prime Minister Mario Draghi. In a message read by President Maria Bianca Farina, Mario Draghi stated that that Italian insurance companies have a crucial role in a decisive phase for the country such as the current one, and investments will be essential to support the Italian recovery, launched with the National Recovery and Resilience Plan.
In addition, another concept that in my opinion is utterly important from the perspective of future growth and industry objectives outlined during the meeting is sustainable development. The fundamental characteristics of the insurance sector – such as risk management, the long-term view linked to both savings and investments – are crucial to increase security and promote sustainable development. So, the objective outlined is to direct investments towards building a more sustainable and inclusive economy. From my point of reference, I think companies in the insurance sector really feel the responsibility of their role in supporting social and economic efforts to achieve climate neutrality by 2050, and it’s up to us to help accelerating the process as much as possible.