What worries the insurance world is inflation and rising interest rates. Another new element for the sector overseen by Ivass is the possibility that the authority chaired by Luigi Federico Signorini is destined to merge with the Bank of Italy in the medium term. Signorini himself pointed to this scenario, illustrating the annual report of the Institute of Insurance Supervision. Strong inflation growth reports that President Ivass is generating a sharp rise in non-life sector costs due to rising claims charges. A dynamic that especially affects the TPL class of the engine, which in terms of premiums represents 34% of the same sector. The other factor that could destabilize the sector is the new season marked by rising interest rates, announced by the ECB. The rise in interest rates has no positive effect on the value of insurance liabilities, while it has an effect on the market value of portfolio securities. At an aggregate level, Signorini explains, in May the balance between latent capital gains and losses became negative (6 billion) for the first time in several years. A passage in the report confirms that the exposures of Italian insurance companies to issuers in Russia and Ukraine are low and are not such as to determine situations of instability for individual operators or for the market.
Profitability and collection
Overall, the outlook for the sector is more cautious than in recent months. For insurance companies, the difficulties have increased again in recent months, although the analyzes lead to consider the effects of the crisis for the sector with all the necessary attention, so far without alarm. In any case, Signorini defines the financial situation of companies as solid. Last year, the ROE was around 9%, lower than in 2020, mainly due to the contraction in the profitability of the non-life business, which in 2020 had benefited from the reduction in car accidents. Premium income grew 4%, returning to pre-pandemic levels. In the life business, which grew by 4.5%, premiums were driven by unit-linked contracts, which increased by 34.5%, in which the investment risk borne by policyholders. Traditional Class I products, on the other hand, decreased by 5.1%, while non-life sector premiums increased by 1.9% mainly for insurance companies other than Rca. The data provided also includes the total amount of government bonds that companies have, which is equivalent to 310 billion.
Rcauto and black box
As for the TPL sector, the average price of a policy in 2021 was 353 euros (30% less than in 2014). The figures indicate that the average passenger premium amounts to € 379 (-4.7% compared to 2020). There are 32.5 million insured vehicles, representing 1.7 million claims (1.4 million in 2020), with an average cost of € 4,516. For mopeds and motorcycles, the average premium amounts to 249 euros (-3.8%). There are 4.2 million insured vehicles, representing 125 thousand claims (103 thousand in 2020), with an average cost of 6,761 euros. The black box is now adopted by more than 20% of insured motorists. The diffusion of electronic devices equipped with a GPS detector has contributed to the reduction of prices, encouraging the adoption of a responsible driving behavior: it is estimated that the black box reduces accidents by 20%, thus allowing to apply rates lower. low for those who adopt it.
The merger with Bankitalia
Finally, the report on the activities carried out by Ivass is an opportunity to highlight the need to transform the supervisory authority into an instrumental body of the Bank of Italy, with the aim of favoring a rationalization of operations. of both authorities. The proposal, explains Signorini, has already been submitted to the government. We have found, it seems to us, attentive ears; we are now awaiting political reflections, as well as, if we are to continue, the necessary opinion of the European Central Bank. But the idea of the merger does not like Assoutenti, who dismisses the operation as inadmissible, because it would represent a disaster for the category of Italian consumers.