ITALIAN INSURANCE IN FIGURES Year 2015
The Italian insurance industry gives a significant contribution to the economy and to the society, offering a wide range of services aiming at risk protection: from motor liability to property protection insurance for damage to property (house, industrial activities) or damage caused by third parties (general liability), from welfare products to life insurance covers. By doing this, the insurance industry helps individuals, families and companies to manage risks and to recoup financial losses in the event of damage. Overall the industry employs about 300 thousand people.
INDEX THE INSURANCE INDUSTRY WORLDWIDE 3 NON-LIFE INSURANCE 5 LIFE INSURANCE 10 BALANCE SHEET 14 THE RESULT OF THE INSURANCE FINANCIAL YEAR 16 THE ITALIAN INSURANCE COMPANIES AND THE HUMAN RESOURCES 17 HOW CUSTOMERS PURCHASE AN INSURANCE COVER 19 The figures published have been collected using balance sheets of national companies and branches of foreign companies with registered offices in the European Economic Area; for the year 2014 data are estimates and thus shall be considered provisional. Figures indicating refer to the Italian direct business. 2
THE INSURANCE INDUSTRY WORLDWIDE Italy ranks fourth in Europe and seventh in the world for premium collection, with 3.6 of market share. Distribution of world premiums collected per country, year 2013 world premium collection: 3,500 bn other countries 34.0 U.S.A. 27.1 Italy 3.6 Germany 5.3 France 5.5 Source: Swiss Re, Sigma n 3/2014-2013 data China 6.0 Great Britain 7.1 Japan 11.5 In 2014, Italy registered a ratio of premiums (non-life and life) to gross domestic product (GDP) equal to 8.9. The increase compared to 2013 (7.4) is essentially due to the growth in life premium (+30). Non-life and life premiums to Gross Domestic Product 11.7 Great Britain 11.1 9.3 8.9 7.5 Japan France Italy U.S.A. 6.6 Germany 3.0 China Source: Insurance Europe and Eurostat - provisional data: 2014 for European countries (2013 for Great Britain); Swiss Re, Sigma n 3/2014-2013 data for China, Japan and the U.S.A. 3
The average premium per inhabitant (non-life and life) in Italy is equal to 1,954 euros, lower than the one registered in the other main industrialized countries. Premiums (non-life and life) per inhabitant, year 2013 3,421 Great Britain 3,155 Japan 2,985 U.S.A 2,802 France 2,233 Germany 1,954 Italy 151 China Source: Swiss Re, Sigma n 3/2014-2013 data The ratio of technical reserves to GDP places Italy fifth among the main European countries. Life reserves to Gross Domestic Product, European comparison, year 2013 90.0 67.8 46.4 30.6 28.2 15.4 Great Britain France The Netherland Germany Italy Spain Source: Insurance Europe - 2013 data; 2012 data for Great Britain. 4
NON-LIFE INSURANCE In 2014 non-life Italian direct business () premiums were equal to 32.8 billion (-2.7 compared to 2013): direct market change Non-life classes premiums share 2014/2013** ( bn) () () motor and marine liability 15.2 46.4-6.5 property* 5.1 15.5 2.5 accident and sickness 5.0 15.3 0.0 general T.P.L. 2.8 8.6-0.6 land vehicles 2.4 7.3-1.1 credit and suretyship 0.5 1.4-2.3 transport* 0.4 1.4-6.8 other non-life classes* 1.4 4.2 9.2 TOTAL 32.8 100.0-2.7 EU branches***: motor and marine liability 0.8 18.0-15.8 other non-life classes (excl. motor and marine liability) 3.7 82.0 4.7 Total 4.5 100.0 0.3 Italian non-life direct premiums per line of business, 2005-2014 bn 40 35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 motor and marine liability other non-life classes (excluding motor ad marine liability) 2014 * Property includes fire and other property damage; transport includes railway rolling stock classes, aircraft, ships, goods in transit and motor liability; the other classes include financial loss, legal expenses and assistance. ** Changes in percentage are calculated in homogeneous terms. *** The figure refers only to branches of insurers with registered offices in the European Economic Area that provide data to ANIA and that represent 95 of the total. 5
The ceded ratio in the non-life classes, defined as the incidence of premiums ceded and retroceded in reinsurance on the total premiums collected (direct and indirect), was equal to 8.8 in 2014, distributed as follows: Non-life ceded ratio (ceded and retroceded premiums/written premiums), year 2014 14.5 2.2 8.8 other non-life classes (excluding motor and marine liability) motor and marine liability total non-life classes In 2014, incurred claims cost, representing costs for settlements, were equal to 21.2 billion, decreasing by 5.4 compared to 2013. Non-life incurred claims cost, 2005-2014 bn 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 motor and marine liability other non-life classes (excluding motor ad marine liability) 6
Technical reserves (claims and premiums), decreasing compared to 2013, were equal to 60.0 billion in 2014. About 28 billion were relative to the motor and marine liability. Non-life technical reserves*, 2005-2014 bn 75 65 55 45 35 25 15 5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 motor and marine liability other non-life classes (excluding motor ad marine liability) The combined ratio, an indicator that compares claims cost and operating expenses to premiums, was equal to 90.1 in 2014 (as in 2013); the increase in the expenses ratio and the decrease of the loss ratio contributed to this result. Non-life combined ratio (loss ratio + expense ratio), 2005-2014 92.7 94.0 94.7 98.7 103.7 100.2 97.9 95.9 90.1 90.1 23.1 23.3 24.4 24.5 24.7 24.4 24.1 24.0 25.0 26.2 69.6 70.7 70.3 74.2 79.1 75.8 73.8 71.9 65.0 63.9 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 loss ratio expense ratio * Technical reserves include both unearned premiums reserve and claims reserves. 7
In 2014, the financial year s loss ratio of the total non-life business improved compared to 2013 (from 65.0 to 63.9), even though in certain classes there was an impairment of the indicator: in particular for transport (from 56.8 to 68.9), for motor and marine liability (from 68.7 to 69.5), for property (from 58.6 to 62.8), for credit and suretyship (from 71.2 to 77.4). Loss ratio (claims cost/earned premiums) non-life classes 2013-2014 Average 2014: 63.9 Average 2013: 65.0 39.1 32.4 54.4 53.8 66.4 60.9 62.8 58.6 83.9 67.4 68.9 56.8 68.7 69.5 71.2 77.4 other non-life classes* accident and sickness land vehicles property* general T.P.L. 2013 2014 transport* motor and marine liability credit and suretyship Generally, classes with a lower loss ratio register a higher expense ratio (operating expenses/written premiums). Expense ratio (operating expenses/written premiums) non-life classes, 2013/2014 Average 2014: 26.2 Average 2013: 25.0 30.8 31.3 33.9 30.6 31.5 29.0 29.7 30.1 30.6 27.4 19.5 21.0 22.0 23.0 37.2 37.2 motor and marine liability transport* land vehicles accident property* and sickness 2013 2014 general T.P.L. credit and suretyship other non-life classes* 8
The overall non-life technical result was positive for 3.6 billion; in particular owing to the motor liability and marine liability class (2.1) and to the accident and sickness classes (0.8). The property, credit and suretyship results were negative (both for 0.1 billion). Non-life insurance technical result breakdown, year 2014 bn 4.8 4.4 4.0 3.6 3.2 2.8 2.4 2.0 1.6 1.2 0.8 0.4 0.0 2.1 motor and marine liability 0.8 accident and sickness 0.3 other non-life classes* 0.2 land vehicles 0.2 0.0 general T.P.L. -0.1-0.1 3.6 transport* credit property* technical and result suretyship Considering both the technical and the non-technical results, the non-life industry registered in 2014 a 2.5 billion return which determined a Return on Equity (ROE) positive and equal to 10.4 (9.8 in 2013). Non-life net results and ROE, 2005-2014 bn, 14.7 14.6 11.6 9.8 10.4 2.8 2.4 2.8-0.9 0.3 3.1 0.6 2.1 2.5-0.2 0.1-1.0-1.0-4.6-4.7 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 profit/loss ( bn) non-life ROE () * Property includes fire and other property damage; transport includes railway rolling stock, aircraft, marine, goods in transit and motor liability; other classes include financial loss, legal expenses and assistance. 9
LIFE INSURANCE In 2014, Italian life direct business () premiums were equal to 110.5 billion (+29.9 compared to 2013): direct market change Life classes premiums share 2014/2013** ( bn) () () class I - traditional 82.6 74.7 27.1 class III - linked 21.8 19.8 40.8 class V - capitalization 4.6 4.2 40.8 other life classes* 1.5 1.3 9.9 TOTAL 110.5 100.0 29.9 EU branches***: class III - linked 2.7 83.8 8.6 other life classes 0.5 16.2 17.4 Total 3.2 100.0 9.9 The increase in written premiums relative to Class I policies (traditional) was equal to 27.1 while Class III policies (linked) had a 40.8 increase (for a business volume of 21.8 billion). Class V policies (capitalization) collected 4.6 billion of premiums, increasing by 40.8. Domestic direct life business premiums, 2005-2014 bn 120 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 traditional and capitalization linked other Life classes* * Other classes include class IV LTC and permanent health insurance and class VI pension funds. ** Changes in percentage are calculated in homogeneous terms. *** The figure refers only to branches of insurers with registered offices in the European Economic Area that provide data to ANIA and that represent 70 of the total. 10
In 2014, incurred claims cost, including the amounts paid and the changes in the provisions for amounts to be paid, were equal to 64.6 billion, decreasing by about 3 compared to 2013. Life incurred claims cost, 2005-2014 bn 80 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 traditional and capitalization 2010 2011 linked 2012 2013 2014 other life classes* In 2014, the technical provisions were equal to 515 billion, increasing by 13.6 compared to 2013. In 2014, the cover ratio was equal to 4.7 (5,3 in 2013). Life technical provisions and cover ratio, 2005-2014 600 500 7 6 technical provisions ( bn) 400 300 200 100 5 4 3 2 1 cover ratio 0 2005 2006 2007 2008 2009 2010 technical provisions 2011 2012 2013 2014 cover ratio 0 11
The net cash flow, defined as the difference between premiums and incurred claims (amounts paid and changes in the provisions for amounts to be paid) was particularly positive in 2014 and equal to 45.9 billion (it was positive and equal to 18.3 billion in 2013). Life net cash flow, 2005-2014 bn 45.9 29.8 23.9 23.3 18.3 11.6-12.9-11.0 2005 2006 2007 2008 2009-0.1-5.3 2010 2011 2012 2013 2014 The life expense ratio (the ratio between operating expenses and written premiums) was equal to 3.4 in 2014, in decrease compared to 4.8 in 2012 and 4.2 in 2013. Life expense ratio (operating expenses/written premiums), 2005-2014 5.9 6.6 7.6 7.4 5.0 4.8 5.2 4.8 4.2 3.4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 12
Overall, in 2014 the life sector recorded a positive technical account result equal to 2.8 billion. The positive result of the traditional and capitalisation policies was the main factor contributing to this positive result. Life technical result breakdown, year 2014 bn 6.0 5.0 4.0 3.0 2.0 2.0 0.7 0.0 2.8 1.0 0.0 traditional and capitalization linked other life classes* technical result Considering the technical and non-technical account results, in 2014 the life sector recorded a 3.5 billion profit determining a ROE equal to 10.1 (it was positive and equal to 9.7 in 2013). Life net profit and ROE, 2005-2014 bn, 12.6 11.3 10.6 15.2 17.3 9.7 10.1 2.9 2.7 2.5 3.8 1.1 0.3 5.1 3.1 3.5-1.8-2.6-7.8 2005 2006 2007 2008 2009 profit/loss ( bn) -8.8 2010 2011 2012 2013 2014 life ROE () * Other classes include class IV LTC and permanent health insurance and class VI pension funds. 13
BALANCE SHEET In 2014, the capital and reserves were equal to 64.4 billion and increased by 0,8. They amounted to 9 of the total liabilities. The overall technical provisions (direct and indirect, domestic and foreign business) were equal to 592 billion, increasing by 11.4 compared to 2013; life provisions, accounting for 75.1 of total liabilities, increased by 13.3, while non-life provisions (claims reserves and unearned premiums reserves), accounting for 9, decreased by over 2. The investments in the insurance sector were equal to 630 billion and account for 90 of total assets. investment breakdown, year 2014 total investments (non-life and life): 630 bn shares 9.0 land and buildings 1.0 loans and deposits 7.6 investments of linked and pension funds 17.3 bonds 65.1 The main investment of the insurance sector is made up of bonds (over 65). 14
The investments in the life sector, in the last three years, were six times as many as the investments in the non-life sector. Non-life and life investments, 2005-2014 bn 549.9 383.7 398.7 388.5 358.2 410.8 442.6 437.3 451.3 483.9 75.8 78.8 77.9 76.5 78.7 74.4 74.0 75.6 79.0 79.7 2005 2006 2007 2008 2009 non-life 2010 2011 2012 life 2013 2014 At the end of 2014, the insurance companies had a solvency margin of 46.7 billion; the margin owned compared to the minimum to be owned (the so-called coverage ratio) was equal to 1.6 in the life sector and 2.7 in the nonlife sector, in slight reduction compared to the previous year (2.6 in non-life and 1.7 in life). Solvency coverage ratio, 2005-2014 3.4 3.3 2.7 2.6 2.9 2.9 2.7 2.8 2.6 2.7 2.1 2.0 1.9 1.7 2.0 1.9 1.7 2.0 1.7 1.6 2005 2006 2007 2008 2009 non-life 2010 2011 life 2012 2013 2014 15
THE RESULT OF THE INSURANCE FINANCIAL YEAR In 2014 the insurance sector recorded an overall profit (life and non-life) equal to 6 billion (5.2 billion of profit in 2013). Breakdown of the result for the financial year of the insurance sector bn 14.0 12.0 10.0 9.5 1.0 8.0 6.0 4.0-2.1-2.4 6.0 2.0 - intermediate operating result* extraordinary income other income taxes result for the financial year Such result generated a ROE equal to 10.2 in 2014 (it was equal to 9.7 in 2013). Result for the financial year and ROE, 2005-2014 bn, 13.8 11.4 12.5 5.9 5.2 5.3 8.5 3.9 11.5 5.8 9.7 5.2 10.2 6.0-2.0-4.7 2005 2006 2007 2008 2009 2010 profit/loss ( bn) -1.4-0.7-3.7-7.1 2011 2012 2013 2014 ROE () * The intermediate operating result includes the technical result of the insurance business and the net income from investments not related to the technical part of the balance. 16
THE ITALIAN INSURANCE COMPANIES AND THE HUMAN RESOURCES At the end of 2014, 226 insurance companies were operating in Italy, of which 125 had registered offices in Italy and 101 were legal representations of foreign companies (99 from EU-member States). 69 companies operated in the life sector (22 of which were representations) and 124 companies operated in the non-life sector (59 of which were representations); 26 companies operated in both life and non-life sectors and 7 operated only in reinsurance. At the end of 2014, 167 companies were ANIA members. There were 999 companies operating in Italy in freedom of services, with registered offices in a EU member State. Number of insurance companies operating in Italy, 2012-2014 235 232 226 100 100 101 135 132 125 2012 2013 national companies branches of foreign companies 2014 As at 31 December 2014, there were 47,452 employees in the insurance sector. This figure is the sum of: - 42,199 units of administrative staff (including about 4,000 employees of bodies controlled by insurance companies which apply the national insurance collective agreement and 1,252 executives); - 5,253 canvassers. 17
However, overall, the insurance sector employs approximately 300,000 people, including the sales network and product distribution staff. In particular, according to the data coming from the Single Electronic Register of Insurance and Reinsurance Intermediaries, as at 31 December 2014, 244,235 units were enrolled in the following sections: Single Register for Intermediaries, 2012-2014 section legal nature 2012 2013 2014 A (agents) Natural person 26,987 26,331 25,533 Legal Person 9,735 9,611 9,515 B (broker) Natural person 3,663 3,822 4,015 Legal Person 1,374 1,463 1,558 C (direct canvassers) Natural person 14,050 8,563 7,252 D (banks, financial intermediaries, stock brokerage companies and Poste Italiane Legal Person 676 653 642 spa Divisione servizi di bancoposta) E (staff involved in mediation outside the premises of the intermediary registered in section A, B or D, for which they conduct business, including their employees and/or collaborators Natural person 175,430 180,706 183,488 Legal Person 13,342 12,350 12,232 Attached list: (intermediaries having residence of registered office in another Subject 7,513 8,022 7,833 EEA member state) Source: Ivass The Single Register for Intermediaries also includes a list concerning information on intermediaries natural or legal persons having residence or registered office in other EU member States or belonging to the European Economic Area allowed to take up insurance and reinsurance mediation activity in Italy in freedom of services or freedom of establishment. At the end of 2014, 7,833 EU intermediaries were enrolled in this section of the Register (8,022 in 2013). 18
HOW CUSTOMERS PURCHASE AN INSURANCE COVER In 2014, 79.3 of non-life policies were sold by agents; however, ANIA estimates that a considerable share, equal to 25.5 of premiums collected by agents, originated by brokers. Therefore, the agents market share would drop to about 53.8, while brokers would reach 34.2. Non-life distribution channels, year 2014 agents 79.3 financial advisers 0.2 bank branches 3.9 direct sales 7.9 brokers 8.7 Breakdown of non-life collection per sales channel, year 2014 100 50 0 agents brokers direct sales financial advisers bank branches motor and marine liability other non-life classes (excluding motor ad marine liability) 19
In 2014, banks were still the main distribution channel for the life sector, recording a further increase in their market share (from 59.3 in 2013 to 62.4 in 2014). The second sales channel was represented by financial advisers who originated over 16 of the premiums written by the sector. Agents ranked third with a market share in slight decrease equal to 12.8; direct sales (7.9) and brokers (0.6) were less used as distribution channels. Life distribution channels, year 2014 bank branches 62.4 financial advisers 16.3 direct sales 7.9 brokers 0.6 agents 12.8 Breakdown of life collection per sales channel, year 2014 100 50 0 agents brokers direct sales financial advisers traditional and capitalization linked other life classes* bank branches * Other classes include class IV LTC and permanent health insurance and class VI pension funds. 20
ITALIAN INSURANCE IN FIGURES Year 2015 Via di San Nicola da Tolentino 72 00187 Roma T +39 06 326 881 Attuariato, Statistiche e Analisi Banche Dati studistatistici@ania.it www.ania.it