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www.pwc.com/it
Deals
The Italian Insurance
Market
October 2014
Agenda
1
2
3
4
5
6
Italian insurance market snapshots
Italian life insurance market
Italian non-life insurance market
3M14 overview & industry outlook
M&A activity
The Italian insurance market in the European context
Page
1
6
15
23
28
32
Italian insurance market snapshots
The Italian Insurance Market • October 2014
PwC
1
Section 1 – Italian insurance market snapshots
Italian insurance market
Key Messages
FY13 Key-data
Italian insurance market GWP
€118.8bn (direct business), +13.0% vs. FY12
o/w Life: €85.1bn (+22.1% vs. FY12)
Non-life: €33.7bn (-4.9% vs. FY12)
Largest Italian insurance companies:
o Life: Poste Vita (market share equal to
15.0%)
o Non-life: UnipolSai Assicurazioni
(market share equal to 9.2%)
Largest Italian insurance groups:
o Life: Generali Group (market share
equal to 15.8%)
o Non-life: Unipol Group (market share
equal to 29.0%)
• In 2013 the Italian insurance market GWP rose by 13% to €118.8bn, thanks to the
contribution given by the life business (+22%) partially offset by non-life (-4.8%)
• The 2013 positive technical result (€6,880m) confirms the trend evidenced in 2012
(€9,696m) following negative results registered in 2010 and 2011. The performance
is due by the increased profitability of non-life (i.e. claims reduction and
improvement of the claims frequency) partially offset by the lower marginality of
life business due to a lower investment result
• Non-life profitability is improving despite premiums contraction : combined ratio
equal to 89.9% (95.9% in 2012) driven by the decrease of claims costs (-9.2%)
• Insurance players continue to be highly dependent on Italian sovereign debt
(56% of the total investment portfolio), which can result in a challenge for the life
with-profit saving products due to the current low interest rate environment
• The number of deals originated in 2013 and over the first half 2014 are likely to
confirm a revamped appetite for the Italian insurance business, primarily from
international investors
2009/2013 Technical result
€ million
Written prem ium s *
Changes in reserv es
Inv estm ent incom e
Other technical incom e
Incurred claim s
Operating expenses
Other technical costs
Technical result
The Italian Insurance Market • October 2014
PwC
FY09
FY10
FY11
FY12
FY13
1 1 5,2 00
(40,953 )
2 6,845
1 ,448
(84,2 07 )
(1 2 ,63 4)
(2 ,2 2 9)
3,47 0
1 2 3 ,546
(3 2 ,82 5)
1 4,1 09
1 ,484
(92 ,1 05)
(1 2 ,540)
(2 ,3 1 1 )
(642)
1 08,42 0
(3 ,1 06)
3 ,97 8
1 ,42 9
(99,3 7 6)
(1 2 ,2 83 )
(2 ,2 7 2 )
(3,210)
1 03 ,1 3 9
(9,63 1 )
2 7 ,480
1 ,560
(98,7 7 6)
(1 1 ,53 9)
(2 ,53 7 )
9,696
1 1 7 ,3 64
(2 9,51 2 )
2 0,050
1 ,63 8
(88,3 1 0)
(1 1 ,7 2 6)
(2 ,62 4)
6,880
* Dir ect & in dir ect bu sin esses, n et of ceded pr em iu m s
Source: ANIA
2
Section 1 – Italian insurance market snapshots
Italian insurance market trend
2009/2013 Italian market GWP
Total premiums written in 2013 rose by 13% to a total of
€119bn (€105bn in 2012)
150.000
120.000
€ million
125.954
117.866
90.000
105.129
36.359
35.413
73.869
69.715
FY11
FY12
35.852
36.746
118.800
110.228
33.690
60.000
81.120
90.102
FY09
FY10
30.000
85.110
-
Life
FY13
Non-Life
2009/2013 Italian market GWP per quarter
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
In 2013 life premiums achieved € 85.1bn, a double digit
growth (+22% vs. 2012) previously registered back in
2009 and 2010. In the same period, non-life fell by 5% to
€33.7bn (-2.6% in 2012)
The Italian market remains dominated by traditional
distribution channels, such as the bancassurance model
in the life segment (59% of total GWP) and agent
networks in non-life (83%). Direct companies are
growing in the motor business, with an 8.3% market
share in 2013
2013 Breakdown of distribution channel
4%
31%
25%
26%
28%
27%
20%
21%
21%
22%
26%
26%
26%
26%
29%
28%
25%
24%
FY10
FY11
FY12
FY13
23%
25%
22%
9%
17%
13%
23%
31%
1%
Life
Non-life
2%
58%
FY09
1Q
Source: PwC analysis on IVASS data
2Q
3Q
83%
59%
4Q
The Italian Insurance Market • October 2014
PwC
Agents
Others
Banks
Financial promoters
3
Section 1 – Italian insurance market snapshots
Investments
2009/2013 breakdown of investments (not related to investment contracts)
408
420
360
€ billion
300
240
180
371
329
311
22
19
15
319
21
11
12
95
98
24
27
9
10
94
68
56%
49
120
60
Other Government Bonds
49
83
13
39
140
150
FY09
FY10
Italian Government Bonds
12%
88
Bonds
23%
Shares
229
191
182
2%
Other investments
7%
FY11
FY12
FY13
Source: PwC analysis on ANIA and BankIT data
2009/2013 main 5 European Government Bonds yield to maturity
Yield to maturity
7,0%
Italy
5,5%
Spain
UK
4,0%
France
Germany
2,5%
1,0%
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Source: Bloomberg
The Italian Insurance Market • October 2014
PwC
4
Section 1 – Italian insurance market snapshots
Top Italian insurance players
2013 top 5 ranking of life insurance companies and groups by GWP
16.000
15,0%
GWP (€ million)
11.507
15,5%
58.6%
Market share held
by top 5 groups
8.000
11.507
10%
7,0%
6,4%
6,9%
5,2%
6.000
8%
6%
7.000
5.936
5.635
4.000
16%
12%
13.172
8,0%
18%
14%
13,5%
13.410
13.172
10.000
15,8%
Groups
13,1%
14.000
12.000
Companies
Market share held
by top 5 companies
47.7%
Market
share
18.000
5.871
4.597
4%
2.000
2%
-
0%
2013 top 5 ranking of non-life insurance companies and groups by GWP
41.2%
Companies
Market share held
by top 5 companies
Groups
GWP (€ million)
12.000
72.5%
29,0%
Market share held
by top 5 groups
6.000
3.000
9.757
9,2%
3.654
20%
7.035
8,9%
3.540
8,8%
3.468
-
8,1%
3.210
15%
12,0%
6,2%
4.029
2.455
30%
25%
20,9%
9.000
35%
Market
share
15.000
10%
5,7%
5,1%
1.904
1.716
5%
0%
Note: UnipolSai is an insurance company, part of Unipol Group, operating since January 2014 and resulting from the merger of the insurance companies Unipol Assicurazioni, Fondiaria SAI, and
Milano Assicurazioni and the former Fondiaria SAI Group holding company Premafin HP.
Source: PwC analysis on ANIA data
The Italian Insurance Market • October 2014
PwC
5
Italian life insurance market
The Italian Insurance Market • October 2014
PwC
6
Section 2 – Italian life insurance market
Italian life insurance market
Key Messages
FY13 Key-data
Italian life insurance market GWP
€85.1bn (direct business), +22.1% vs. FY12
Life products distributed mainly
through banking channel (59%)
Largest life insurance company:
Poste Vita (market share equal to 15.0%)
Largest life insurance group:
Generali Group (market share equal to
15.8%)
78 insurance companies operating in
the life business (81 in 2012)
2013 # of companies by GWP
22
16
GWP
>€5bn
5
€5bn€1bn
2009/2013 Technical result
€ million
31
4
• 2013 technical result is positive (€3,328m), however this is 52% lower than
2012 (€6,932m) despite the increase on the top line which was offset by the
change in mathematical reserve and the lower investment incomes
• 22.1% increase in GWP and 15.6% reduction of surrenders resulting in a net
cash flow of €18.6bn (-€5.2bn in 2012)
• Positive trend of financial markets performance pushing policyholders to invest
their savings in insurance products (total investments in insurance life products
amount to almost €460bn in 2013)
• Low degree of market maturity and significant potential for growth driven by an
ever increasing need for complementary retirement scheme
• The spending per capita of Italians (€1,083), still remains below the EU average
(€1,843)
€1bn- €100m<€50m
€0.1bn €50m
Written prem ium s *
Changes in technical prov isions
Inv estm ent incom e
Other technical incom e
Incurred claim s
Operating expenses
Other technical costs
Technical result
FY09
FY10
FY11
FY12
FY13
81 ,409
(40,97 4)
2 4,406
97 6
(57 ,3 42 )
(4,1 69)
(1 ,064)
3,242
90,592
(3 2 ,3 2 9)
1 3 ,01 4
1 ,044
(66,999)
(4,3 99)
(1 ,1 90)
(267 )
7 4,3 68
(2 ,644)
3 ,3 3 8
97 8
(7 4,1 7 7 )
(3 ,961 )
(1 ,2 1 8)
(3,316)
7 0,3 7 6
(1 0,1 2 5)
2 5,82 0
1 ,091
(7 5,2 96)
(3 ,52 1 )
(1 ,41 3 )
6,932
85,7 56
(3 0,1 3 8)
1 8,7 86
1 ,2 1 2
(66,999)
(3 ,685)
(1 ,604)
3,328
* Dir ect & in dir ect bu sin esses, n et of ceded pr em iu m s
The Italian Insurance Market • October 2014
PwC
Source: ANIA
7
Section 2 – Italian life insurance market
Italian life insurance market trend
2009/2013 Italian market life GWP
100.000
90.000
80.000
70.000
€ million
60.000
50.000
40.000
81.120
90.102
85.110
73.869
69.715
FY11
FY12
30.000
20.000
10.000
The rebound of the financial markets combined with the
regained confidence of policyholders to invest savings in
insurance products resulted in a significant GWP growth in
2013 (+22.1%). The attitude of Italians is to invest in
traditional life products, with premiums rising by 26.9%, to
both protect their capital invested and get a minimum
guarantee of return. Financially oriented life products, such
as unit/index linked and capitalisation contracts, increased
by 8.7%
-
FY09
FY10
FY13
2009/2013 Split between traditional & investment contracts
FY13
76%
FY12
73%
27%
FY11
77%
23%
FY10
75%
25%
FY09
0%
80%
20%
40%
Traditional contracts
As a consequence of the financial crisis that started in
2007-2008, the business mix of the Italian life insurance
market has changed significantly, with an overall decrease
in sales of investment products in favour of traditional. In
2013 investment contracts represent approx. a quarter of
the life segment
24%
20%
60%
80%
100%
Investment contracts
Source: PwC analysis on IVASS data
The Italian Insurance Market • October 2014
PwC
8
Section 2 – Italian life insurance market
Breakdown by quarter of Italian life insurance market
2009/2013 GWP breakdown by quarter
+11% -18%
+23% -19%
100.000
+40% -22%
€ million
80.000
60.000
+69% -23%
+18%
56.225
40.340
+23%
90.102
85.110
81.120
73.869
69.124
51.674
36.967
40.000
20.000
-21%
-12%
-10%
+20%
+22%
-6%
56.195
69.715
62.168
50.522
42.593
35.444
28.201
16.722
21.785
17.251 20.297
3M09 3M10 3M11 3M12 3M13
6M09 6M10 6M11 6M12 6M13
Traditional products
Unit & Index linked
9M09 9M10 9M11 9M12 9M13
Capitalisations
12M09 12M10 12M11 12M12 12M13
Others (sickness or mutual funds)
Source: PwC analysis on IVASS data
Sales continue to be dominated by single premium
business, confirming the Italians attitude to invest a
lump-sum instead of having annual/recurring premiums
to pay
The 'lump sum' Italian approach can be explained by the
fact that the life insurance products are sold more for
their saving than protection or annuity characteristics
2009/2013 Annual, single and recurring premiums
FY13
7,3%
80,6%
12,0%
77,8%
13,4%
78,6%
13,1%
FY10 7,0%
81,3%
11,7%
FY09
79,1%
12,9%
FY12
8,8%
FY11
8,3%
8,0%
0%
20%
Annual premiums
The Italian Insurance Market • October 2014
PwC
40%
60%
Single premiums
80%
100%
Recurring premiums
Source: PwC analysis on IVASS data
9
Section 2 – Italian life insurance market
Distribution channel and investments overview
2009/2013 GWP by sales channel
100%
90%
16,3%
15,8%
18,3%
23,3%
58,8%
60,3%
54,8%
48,6%
1,2%
1,4%
1,4%
1,5%
23,7%
22,6%
25,6%
26,6%
23,0%
FY09
FY10
FY11
FY12
FY13
16,7%
80%
70%
60%
50%
59,1%
40%
30%
20%
10%
In line with other EU countries, such as France and
Spain, banks represent the most significant distribution
channel in the life insurance market (c. 59% of total
premiums). As a result, sales levels depend more on
banking partners decisions and strategies than insurance
players
1,2%
0%
Agents
Others
Source: PwC analysis on IVASS data
Banks
Financial promoters
2009/2013 Breakdown of investments
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
€263 billion
€285 billion
€277 billion
€326 billion
€362 billion
6%
4%
7%
3%
6%
2%
32%
28%
25%
6%
2%
23%
6%
2%
22%
59%
62%
66%
69%
69%
FY09
FY10
FY11
FY12
FY13
Corporate bonds
Shares
Government bonds
Source: PwC analysis on ANIA data
The Italian Insurance Market • October 2014
PwC
The investment strategy of Italian life insurance companies
is conservative with the portfolio being primarily invested
in fixed-income assets (c.92%). Italian insurers tend to
match their liabilities with government bonds, leading to a
high level of exposure investment in Italian government
debt
Of the overall government bonds by Italian life insurance
companies, 81% of these are related to Italy and 19% to
other countries
Others
10
Section 2 – Italian life insurance market
Breakdown of net flow
2013 Breakdown of net flow
90.000
Inflow
Outflow
4,306
12,328
80.000
68,424
70.000
€ million
60.000
50.000
(39,643)
40.000
30.000
(21,395)
20.000
18,625
(5,395)
10.000
4%
Single Premiums
Recurring Premiums
4% 1%
9%
Recurring Premiums
1st year
Redemptions
41%
6% 1%
1% 1%
2% 4%
Maturities & Yields
4% 2%
Total Net Flow
18%
17%
18%
Claims
20%
25%
46%
74%
77%
Source: PwC analysis on ANIA data
Traditional products
The Italian Insurance Market • October 2014
PwC
44%
50%
68%
81%
Unit & Index linked
82%
Capitalisations
Other LoBs
11
Section 2 – Italian life insurance market
Breakdown of net flow by LoB
2013 Breakdown of net flow per LoB
25.000
Inflow
Outflow
23,064
20.000
18,625
510
(4,881)
(68)
64,950
(26,731)
15.000
(10,749)
€ million
Traditional
products
(4,406)
15,513
10.000
23,064
(10,055)
Unit & Index
linked
(9,372)
(967)
(4,881)
64,950
3,249
5.000
(26,731)
(2,467)
(10,749)
Capitalisations
(840)
(4,406)
23,064
(10)
(68)
GWP
Redemptions
Maturities
Claims
Net Flow
Traditional products
Unit & Index linked
Capitalisations
Other LoBs
Total Net Flow
Source: PwC analysis on ANIA data
The Italian Insurance Market • October 2014
PwC
12
Section 2 – Italian life insurance market
Portfolio lapse index and average duration
2009/2013 Portfolio lapse index and average duration
7
15,8%
16,7%
17,8%
17,7%
17,2%
17,0%
20%
16,1%
15,0%
6
15%
Years
5
4
10%
3
2
5,64
4,46
4,43
FY09
FY10
6,05
5,86
5,59
5,33
5,20
5%
1
-
0%
FY11
FY12
3M13
Average duration
6M13
9M13
FY13
Lapse index
2009/2013 Portfolio lapse index composition
21%
18%
15,8%
16,7%
15%
12%
9%
6,0%
0,9%
18,3%
5,6%
5,7%
1,1%
1,1%
17,2%
5,0%
6,5%
1,2%
17,0%
5,1%
1,1%
1,0%
6%
8,9%
17,8%
9,1%
11,1%
11,5%
11,0%
10,7%
2013 Portfolio lapse index and average duration per LoB
16,1%
5,0%
1,2%
9,9%
15,0%
4,8%
1,2%
9,0%
3%
0%
FY09
FY10
FY11
Surrender index
3M12
3M13
Claim index
6M13
In 2013 the reduction of the spread between Italian and the
German government bonds allowed portfolio managers to
review their ALM strategy resulting in a decrease of the
average duration to 5.20 years (6.05 years in 2012). This
appears to confirm that the investment portfolio strategy is
heading back to a shorter duration, in line with 2010 and
2009 (approx. 4.5 years)
9M13
FY13
Maturity index
Source: PwC analysis on ANIA data
The Italian Insurance Market • October 2014
PwC
Years
8
At the end of 2013 the lapse index showed a reduction of the
ratio (calculated as total claims on technical reserves) to
15%, after a significant increase recorded during the
financial crisis period resulting from high levels of
surrenders
12
11
10
9
8
7
6
5
4
3
2
1
-
25%
22,5%
20%
15,0%
13,2%
15%
12,8%
10%
7,97
4,88
5,84
5,20
5%
0%
Traditional
products
Unit & Index linked
Average duration
Capitalisations
Life LoBs
Total
Lapse index
13
Section 2 – Italian life insurance market
Solvency
2003/2013 Life solvency margin
40.000
2,19
35.000
2,5
2,04
2,08
2,03
24.435
23.999
20.000
20.000
20.954
10.000
5.000
1,75
1,74
9.132
10.266
26.578
27.362
29.019
26.825
19.699
11.544
1,5
22.722
12.041
11.890
11.587
1,0
13.444
14.668
15.400
15.980
16.581
0,5
-
0,0
FY03
Source: ANIA
2,0
31.624
25.000
15.000
1,98
1,87
1,70
30.000
€ million
1,98
1,91
FY04
FY05
FY06
FY07
Available solvency margin
At the end of 2013 Italian insurance companies showed an
overall (life and non-life) available solvency margin equal
to €45.2bn, registering a 10% reduction in respect of 2012
The solvency ratio of the life insurance industry was 1.75x
(1.98x in 2012), with a surplus of €12.4bn (€15.6bn in
2012)
Italian insurance companies are still reporting their
available solvency margin under Solvency I. However they
are approaching Solvency II based on specific rules issued
by IVASS during the first half 2014
The Italian Insurance Market • October 2014
PwC
FY08
FY09
Required solvency margin
FY10
FY11
FY12
FY13
Solvency ratio
Solvency II represents a fundamental review of capital
adequacy and risk management for the European
insurance industry. The new rules for calculating solvency
require the insurance companies to review their capital
structure and risk management approach, with a
significant impact on technical provisions, governance
and disclosure of information to their shareholders and
stakeholders
The original Solvency II implementation date has been
postponed several times and now the current deadline is
2016
14
Italian non-life insurance market
The Italian Insurance Market • October 2014
PwC
15
Section 3 – Italian non-life insurance market
Italian non-life insurance market
Key Messages
FY13 Key-data
Italian insurance market GWP
€33.7bn (direct business), -4.9% vs FY12
Non-life products distributed mainly
through agents (83%)
Largest non-life insurance company:
UnipolSai Assicurazioni (market share
equal to 9.2%)
Largest non-life insurance group:
Unipol Group (market share equal to
29.0%)
136 insurance companies operating
in the non-life business (137 in 2012)
• Despite the negative trend of GWP (-4.9%), the non-life sector achieved in 2013
a €3,552m positive technical result, driven by the claims costs reduction. The
underwriting result was 11.2% (FY12: 8.4%) of total non-life written premiums
• Motor insurance represents close to 55% of the overall non-life business in 2013
• Decrease in claims occurred from 2011 to 2012 (-6.8%) and from 2012 to 2013 (9.2%), resulting in price reductions
• Non-life market is mature and slightly decreasing with a 09/13 CAGR equal
to -2.1%
• 4.9% decrease in GWP (€35.4bn in 2012) is driven by the motor business (-7.7%
compared to 2012) as a result of a reduction in insured vehicles (from 39.2 in
2013 to 38.2 millions in 2013) and tariffs
• There continues to be a lack of penetration and development of non-motor lines
of business compared to other European countries
2009/2013 Technical result
2013 # of companies by GWP
€ million
72
25
18
13
8
GWP
>€5bn
€5bn€1bn
€1bn- €100m<€50m
€0.1bn €50m
The Italian Insurance Market • October 2014
PwC
Written prem ium s *
Changes in prem ium s reserv es
Inv estm ent incom e
Other technical incom e
Incurred claim s
Operating expenses
Other technical costs
Technical result
FY09
FY10
FY11
FY12
FY13
3 3 ,7 91
21
2 ,43 9
47 2
(2 6,865)
(8,465)
(1 ,1 65)
228
3 2 ,954
(496)
1 ,095
440
(2 5,1 06)
(8,1 41 )
(1 ,1 2 1 )
(37 5)
3 4,052
(462 )
640
451
(2 5,1 99)
(8,3 2 2 )
(1 ,054)
106
3 2 ,7 63
494
1 ,660
469
(2 3 ,480)
(8,01 8)
(1 ,1 2 4)
2,7 64
3 1 ,608
62 6
1 ,2 64
42 6
(2 1 ,3 1 1 )
(8,041 )
(1 ,02 0)
3,552
* Dir ect & in dir ect bu sin esses, n et of ceded pr em iu m s
Source: ANIA
16
Section 3 – Italian non-life insurance market
Italian non-life insurance market trend
2009/2013 Italian market non-life GWP
2009/2013 Split between motor and non-motor LoB
37.000
Motor
€ million
36.500
Non-Motor
100%
36.000
90%
35.500
80%
35.000
70%
34.500
45,2%
44,4%
43,2%
43,0%
44,7%
54,8%
55,6%
56,8%
57,0%
55,3%
FY09
FY10
FY11
FY12
FY13
60%
36.746
34.000
35.852
36.359
50%
35.413
33.500
40%
30%
33.000
33.690
20%
32.500
10%
32.000
FY09
FY10
FY11
FY12
0%
FY13
Source: PwC analysis on IVASS data
Source: PwC analysis on IVASS data
2009/2013 Breakdown of GWP by LoBs
25.000
20.147 19.926
20.652
€ million
20.000
20.190
18.644
15.000
10.000
5.378 5.249 5.208 5.113 5.031
5.080 4.970 4.989 4.917 4.947
5.000
3.339 3.072 2.933 2.939 2.848
2.802 2.637 2.577 2.254 2.221
General TPL
Other
Motor
Accident & Sickness
Source: PwC analysis on IVASS data
The Italian Insurance Market • October 2014
PwC
FY09
Fire & other damages
FY10
FY11
FY12
FY13
17
Section 3 – Italian non-life insurance market
Breakdown of non-life market and distribution channels
2009/2013 GWP breakdown by quarter
80.000
-2.4% +1.4% -2.6% -4.9%
70.000
-2.6% +2.8% -2.1% -4.7%
€ million
60.000
-3.1% +3.0% -1.8% -5.0%
50.000
40.000
36.746 35.852 36.359 35.413
33.690
-3.6% +3.2% -1.2% -5.6%
25.678 25.007 25.713 25.168 23.988
30.000
18.406 17.843 18.385 18.059 17.159
20.000
10.000
8.832 8.514 8.791 8.687 8.198
3M09 3M10 3M11 3M12 3M13
6M09 6M10 6M11 6M12 6M13
Motor
Source: PwC analysis on IVASS data
Accident & Sickness
2009/2013 Trend of sales channel
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0,1%
2,6%
12,2%
0,1%
3,4%
12,1%
0,1%
3,5%
12,7%
0,1%
3,2%
12,6%
0,2%
3,6%
13,1%
85,1%
84,4%
83,8%
84,1%
83,2%
FY09
FY10
FY11
FY12
FY13
Agents
Others
Banks
9M09 9M10 9M11 9M12 9M13
Fire & other damages
General TPL
12M09 12M10 12M11 12M12 12M13
Other
The negative trend which characterises the non-life
insurance market is mainly attributable to motor TPL (7.5% or €1,312m vs. 2012) and land vehicles (-8.9% or
€235m)
Sales of non-life insurance remains dominated by agents
which hold a market share of 83.2% (84.1% in 2012).
Agents represent the dominant distribution channel in
all LoBs, with the exception of ships, goods in transit and
aircraft third party liability, where brokers dominate
Financial promoters
Source: PwC analysis on IVASS data
The Italian Insurance Market • October 2014
PwC
18
Section 3 – Italian non-life insurance market
Direct sales keep on growing
2013 Non-life GWP from direct sales
In 2013 sales through internet
and telephone channels
represented 4.7% of total non-life
GWP (8.3% of motor)
Direct companies accounted
GWP equal to €1,952m, of which
€1,769m (or 91%) related to
motor business
Direct companies are part of
leading insurance groups, except
for Direct Line being part of the
Royal Bank of Scotland Group
In the Italian non-life insurer
ranking, Direct Line, Genialloyd
and Genertel are ranked #12, #13
and #14 respectively
€ million Direct Line
Genialloyd
Genertel
Linear
Zurich
Connect
Quixa
Dialogo
Total
by LoB
MTPL
362.0
398.7
352.6
173.0
104.4
105.8
20.5
1,517.0
Other
Motor
113.5
62.5
33.2
16.9
16.6
8.4
1.0
252.1
Accident &
Sickness
28.3
16.0
21.7
8.9
4.3
3.0
0.7
82.9
Fire & other
damages
0.6
3.6
6.9
0.4
0.1
0
0
11.6
GTPL
0.2
1.4
3.7
0.2
0
0
0
5.5
Other
8.7
29.8
28.6
6.8
4.7
3.7
0.6
82.9
513.3
512.0
446.7
206.1
130.0
121.0
22.9
1,952.0
# 12
# 13
# 14
# 29
# 41
# 42
# 87
Total by
company
Ranking non-life
insurance market
2009/2013 Trend of direct sales
10%
Non-life market
Motor LoBs
8%
8,3%
7,5%
6%
6,6%
5,9%
4,9%
4%
3,6%
2%
4,1%
4,7%
4,8%
2,9%
0%
The Italian Insurance Market • October 2014
PwC
FY09
Source: PwC analysis
FY10
FY11
FY12
FY13
19
Section 3 – Italian non-life insurance market
Six main players are active in the Italian insurance
aggregator market
*
Setting-up
2008**
2008**
2008
2000
2010
2011
Ownership
Real Web, Grupo
Imoveis, others
MutuiOnline
Founder, FILAS,
others
Assiteca,
management,
Principia, Insec
Blackfin Capital
Partners
Daina Finance
Insurance
Loans
Bank accounts
Utilities
Mobile phone
Insurance
Loans
Bank accounts
Utilities
Insurance
Loans
Bank accounts
Utilities
Mobile phone
Insurance
ADSL
Insurance
Loans
Utilities
Travel
Insurance
Loans
Utilities
Revenues from
insurance
business
21,287
20,568
1,515
1,645
n.a.
n.a.
EBITDA
(2,439)
2,955
128
(1,372)
n.a.
n.a.
Services
provided
* Figures refer to the brokerage business unit of MutuiOnline; ** With the brands "Assicurazione.it" and "Cercassicurazioni"; *** 2013 figures for Segugio.it and 6sicuro, and 2012 for other players.
Source: PwC analysis of companies' financial statements, public information
Aggregator penetration in the motor direct insurance business
Italy
2% 6%
France
8%
11%
14%
United Kingdom
Germany
0%
Aggregator
9%
10%
# of policies
Other direct channels
≈1,000,000
25%
35%
6%
55%
20%
Redemption
of quotes
15%
20%
The Italian aggregator market
30%
40%
50%
60%
≈5%
Mediated GWP
Annual
growth
rate
+20/25%
≈ €530m
Incidence on Motor
new business
≈ 44%
Source: PwC analysis, interviews and press release
The Italian Insurance Market • October 2014
PwC
20
Section 3 – Italian non-life insurance market
Expense, loss and combined ratios
2009/2013 Combined ratio
120%
103,7%
100,2%
97,9%
95,9%
75,8%
73,8%
71,9%
64,9%
24,7%
24,4%
24,1%
24,0%
25,0%
FY09
FY10
FY11
FY12
FY13
100%
89,9%
80%
60%
79,1%
40%
20%
0%
Expense ratio
Source: ANIA
Loss ratio
2013 Expense, loss and combined ratios by LoB
180%
156,7%
Loss ratio
In 2013 the 9.2% decline in claims costs to €21.3bn
resulted in a loss ratio of 64.9% (71.9% in 2012). Despite
administrative costs remaining stable, the reduction in
premiums resulted in a 1% increase in the expense ratio
to 25% (24% in 2012)
As a result the combined ratio improved from 95.9% in
2012 to 89.9% in 2013, resulting in a higher level of
profitability for the non-life industry with a technical
result equal to €3.5bn (€2.8 in 2012). Since 2009 the
Italian non-life market has recorded a continuous
improvement in the combined ratio benefiting from both
the revision of underwriting policies by the largest
insurers and the reorganisation of operating processes,
including the improvement of new anti-fraud measures
Expense ratio
140%
100%
60%
20%
95,8%
76,0%
42,4%
97,4%
93,3%
137,8%
71,0%
74,5%
66,0%
58,0%
22,3%
68,6%
39,4%
79,7%
47,7%
114,0% 116,7%
88,1%
100,2% 96,8%
70,3%
67,7%
83,7%
89,4%
67,7%
68,7%
37,5%
19,8%
17,7%
30,3%
27,3%
32,5%
Aircraft
liability
General
TPL
Credit
Suretyship
33,5%
24,8%
27,3%
22,8%
19,0%
16,5%
29,2%
32,0%
29,7%
19,5%
Accident
Sickness
Land
vehicles
Railway
rolling
stocks
Aircraft
Ships
Goods in
transit
Fire and
natural
forces
Other
damage to
property
Motor
vehicle +
Ships
liability
53,5%
61,1%
34,7%
27,8%
43,2%
35,6%
33,3%
Financial
loss
Legal
expenses
Assistance
-20%
Source: ANIA
The Italian Insurance Market • October 2014
PwC
21
Section 3 – Italian non-life insurance market
Non-life solvency margin
2003/2013 Non-life solvency margin
30.000
€ million
25.000
3,42
2,92
2,97
2,72
20.000
15.000
20.826
15.615
4,0
3,25
2,61
3,5
2,88
2,72
2,75
2,56
3,0
2,5
20.382
17.585
17.308
2,85
19.236
19.018
16.805
18.465
18.542
16.227
2,0
1,5
10.000
1,0
5.000
5.356
5.825
6.095
6.263
6.473
6.446
6.758
6.599
6.786
6.748
6.348
-
0,0
FY03
Source: ANIA
0,5
FY04
FY05
FY06
FY07
Available solvency margin
At the end of 2013 Italian insurance companies showed an
overall (life and non-life) available solvency margin equal
to approx. €45.2bn representing almost two times the
minimum required by law (€22.9bn)
The solvency ratio of the non-life insurance industry was
2.56x (2.75x in 2012), with a surplus of €9.9bn
The Italian Insurance Market • October 2014
PwC
FY08
FY09
Required solvency margin
FY10
FY11
FY12
FY13
Solvency ratio
Currently, the solvency requirement is determined as the
greater of (plus other adjustments for high risk premiums):
• 18% of premiums written up to €50m + 16% of premiums
above €50m; and
• 26% of claims up to €35m + 23% of claims above €35m
With the introduction of Solvency II (the implementation is
foreseen by 2016) risk charges for non-life business will be
recalibrated. However some non-life insurers may require
additional capital to meet the new requirements and may
also have to consider the structure of their business in order
to satisfy the new regime
22
3M14 overview & industry outlook
The Italian Insurance Market • October 2014
PwC
23
Section 4 – 3M14 overview & industry outlook
3M14: Insurance market trend update
3M10/3M14 Italian market GWP
40.000
36.715
35.000
€ million
30.000
8.514
35.460
30.576
8.791
25.000
7.967
8.198
8.687
20.000
15.000
28.495
25.937
28.201
27.493
21.785
10.000
20.297
17.251
5.000
3M10
Source: PwC analysis on IVASS data
3M11
3M12
Life
3M13
3M14
Non-Life
3M14 total GWP show an increase of €6,965m (from
€28,495m in 3M13 to €35,460m in 3M14, equal to +24.4%). 3M14 Italian Life & non-Life GWP breakdown per LoB
The volume of GWP collected in the first three months of
Non-life market - Breakdown per motor and non-motor
2014 is substantially in line with the results reached in 3M10,
1%
3%3M13
14%
confirming the positive performance recorded in 3M13 with
4%2%
respect to 3M12
21%
3M14 life GWP increased by 35.5% due to the significant
growth of traditional contracts(+49.1%) which more than
offset the slight reduction of investment products (-3.1%)
Nonlife
42%
56%
58%
74%
81%
3M14 non-life GWP shows a decrease of 2.8% in comparison
with 3M13, mainly due to the reduction of motor TPL (-6.9%)
The Italian Insurance Market • October 2014
PwC
44%
Life
Traditional products
Unit & Index linked
Capitalizations
Others (Mutual funds & Sickness)
Source: PwC analysis on IVASS data
Motor
Non-Motor
24
Section 4 – 3M14 overview & industry outlook
3M14: Italian life insurance market update
3M10/3M14 Life GWP quarter breakdown per LoB
25.000
22.345
21.539
€ million
20.000
16.883
14.981
13.043
15.000
10.000
4.612
5.000
3.526 3.074 4.183 3.856
1.619 925
691
769
940
430
451
443
364
354
Traditional products
Unit & Index linked
3M10
Source: PwC analysis on IVASS data
3M11
2010/3M14 Breakdown per premium
Capitalisations
3M12
3M13
Others (Mutual funds & Sickness)
3M14
2010/3M14 Breakdown per channel
100%
3M14
5,4%
84,9%
9,7%
FY13
7,3%
80,6%
12,0%
90%
16,7%
13,0%
59,1%
67,5%
15,8%
18,3%
23,3%
60,3%
54,8%
48,6%
1,4%
1,4%
1,5%
22,6%
25,6%
26,6%
23,0%
18,4%
FY10
FY11
FY12
FY13
3M14
80%
70%
60%
FY12
8,8%
77,8%
13,4%
78,6%
13,1%
50%
40%
FY11
8,3%
30%
20%
FY10 7,0%
81,3%
11,7%
10%
1,2%
1,1%
0%
0%
20%
Annual premiums
40%
60%
Single premiums
80%
100%
Recurring premiums
Source: PwC analysis on IVASS data
The Italian Insurance Market • October 2014
PwC
Agents
Others
Banks
Financial promoters
25
Section 4 – 3M14 overview & industry outlook
3M14: Italian non-life insurance market update
3M10/3M14 Non-life GWP breakdown
10.000
8.791
8.514
2010/3M14 Breakdown per channel
8.687
8.198
7.967
3.408
3.480
€ million
8.000
3.665
3.617
3.572
6.000
4.000
2.000
4.897
5.126
5.115
4.790
4.487
3M10
3M11
3M12
3M13
3M14
-
Motor
0,1%
3,4%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
12,1%
0,1%
3,5%
12,7%
0,1%
3,2%
12,6%
0,2%
3,6%
13,1%
0,2%
3,8%
12,4%
84,4%
83,8%
84,1%
83,2%
83,6%
FY10
FY11
FY12
FY13
3M14
Non-Motor
Agents
Source: PwC analysis on IVASS data
Others
Banks
Financial promoters
Source: PwC analysis on IVASS data
3M11/3M14 Non-motor GWP breakdown per LoB
6.000
5.126 5.115 4.790
€ million
5.000
4.487
4.000
3.000
2.000
1.314 1.311 1.240 1.285
1.015 1.015
1.000
994 1.022
675
644
631
621
661
602
543
553
Motor
Accident & Sickness
Source: PwC analysis on IVASS data
The Italian Insurance Market • October 2014
PwC
Fire & other damages
3M11
3M12
3M13
General TPL
Other
3M14
26
Section 4 – 3M14 overview & industry outlook
Industry outlook
The Organization for Security and Co-operation in Europe
(OCSE), estimates that, after two years of recession,
Italian GDP will return to growth in 2014 (+0.5%)
2013/2014 Life GWP
120.000
109.792
Despite the positive signs coming from the general
economy, Italian non-life GWP are expected to decrease by
1.7% in 2014, as motor TPL business will experience a 6%
reduction due to lower 2013 claims reducing the tariffs in
2014. Other non-life LoBs (with exception of General
TPL), on the other hand, are expected to benefit from the
positive economic outlook and record an increase in GWP.
In particular, land vehicles GWP are expected to grow by
3.5%, after 6 years of constant reduction, due to a slight
increase in car sales
85.110
80.000
60.000
40.000
27.493
20.297
20.000
3M
12M
FY13
FY14
Source: PwC analysis on ANIA data
2013/2014 Non-life GWP
40.000
33.690
35.000
25.000
20.000
15.000
10.000
8.198
7.967
5.000
3M
12M
FY13
The Italian Insurance Market • October 2014
PwC
33.118
30.000
€ million
According to the Italian Association of Insurance
Companies (ANIA), the Italian insurance market will
benefit from the path traced by the general economy. The
forecast growth will be fuelled by the life business, whose
premiums, after the strong growth achieved in 2013
(+22.1%), are estimated to further increase (+29%) in
2014. The results of the first three months of 2014 indicate
confirmation of this, as life GWP were 35.5% higher than
the same period of 2013
€ million
100.000
FY14
Source: PwC analysis on ANIA data
27
M&A activity
The Italian Insurance Market • October 2014
PwC
28
Section 5 – M&A activity
M&A Transactions
Main deals in 2013 and early 2014
Life market - Recent transactions
#
1
2
3
4
5
6
7
8
9
10
Year
Target
Bidder
2 01 3
2 01 2
2 01 1
2 01 1
2 01 0
2 01 0
2 01 0
2 008
2 009
2 008
Eu r ov it a A ssicu r a zion i
Ch ia r a V it a
Bipiem m e V it a SpA
BNL V it a SpA
A v iv a Life SpA
A r ca V it a
Bipiem m e V it a SpA
Er g o Pr ev iden za
BCC V it a
Qu a dr ifog lio V it a
JC Flow er s
Helv et ia Holdin g A G
Cov ea
Ca r dif A ssicu r a zion i SpA
A v iv a It a lia Holdin g SpA
Un ipol
Ba n ca Popola r e di Mila n o Sca r l
Mu n ich Re
Ca t t olica A ssicu r a zion i
A x a Mps
Stake %
7 9 .6 %
3 0 .0 %
8 1 .0 %
5 1 .0 %
5 0 .0 %
6 0 .0 %
5 1 .0 %
2 9 .7 %
5 1 .0 %
1 0 0 .0 %
Deal Size
(€m)
47
23
243
325
30
27 0
113
117
44
142
Non-life market - Recent transactions
#
1
2
3
4
5
6
7
8
9
10
Year
Target
Bidder
2 01 4
2 01 3
2 01 2
2 01 2
2 01 1
2 01 0
2 009
2 008
2 008
2 007
Mila n o A ssicu r a zion i SpA
Fa t a A ssicu r a zion i Da n n i
Fon dia r ia -SA I Gr ou p
Ch ia r a A ssicu r a zion i
Fon dia r ia -SA I SpA
A r ca A ssicu r a zion i
Ubi A ssicu r a zion i SpA
Pa da n a A ssicu r a zion i SpA
Cr edem A ssicu r a zion i SpA
Nu ov a T ir r en a SpA
A llia n z
Ca t t olica A ssicu r a zion i
Un ipol
Helv et ia Holdin g A G
Un icr edit Gr ou p
Un ipol
For t is In su r a n ce/BNP Pa r iba s A ss.
Helv et ia Holdin g A G
Rea le m u t u a
Gr ou pa m a SA
* renewal rights on an insurance portfolio + 7 2 9 agencies
Stake %
N/A *
1 0 0 .0 %
4 2 .0 %
5 1 .0 %
6 .6 %
6 7 .4 %
5 0 .0 %
1 0 0 .0 %
5 0 .0 %
1 0 0 .0 %
Deal Size
(€m)
440
179
954
17
170
1 01
120
44
18
1 ,2 5 0
 October 2013: Approval of the merger
between Unipol Assicurazioni, Fondiaria-Sai,
Milano Assicurazioni, and Premafin
Finanziaria Holding
 November 2013: Cattolica Assicurazioni
acquired Fata Assicurazioni Danni from
Assicurazioni Generali for a reported
enterprise value of €179m
 November 2013: JC Flowers acquired a
79.62% stake in Eurovita Assicurazioni from
Aviva and Banco Popolare for a consideration
of €47m
 March 2014: Allianz has acquired €1.1bn of
GWP, 729 agencies and 500 employees of
Milano Assicurazioni from UnipolSai for a
consideration of €440m
Announced deals in 2014
 Carige Assicurazioni (Non-life GWP: €429m)
 Carige Vita Nuova (Life GWP: €623m)
 Direct Line (Non-life GWP: €513m)
Note: GWP refer to FY13
Source: PwC analysis on Mergermarket data
The Italian Insurance Market • October 2014
PwC
29
Section 5 – M&A activity
M&A multiples - Italy
Deal value / GWP
1,20 x
Deal value / Net equity
1,07 x
1,06 x
3,00 x
1,00 x
2,25 x
2,50 x
0,80 x
0,60 x
0,53 x
0,60 x
1,78 x
2,00 x
1,63 x
1,50 x
0,40 x
1,00 x
0,20 x
0,50 x
0,00 x
0,00 x
2000/YTD
Post Lehman
2000/YTD
Non-life
Post Lehman
2000/YTD
Life
Post Lehman
Non-life
Goodwill GWP
0,80 x
0,70 x
0,60 x
0,50 x
0,40 x
0,30 x
0,20 x
0,10 x
0,00 x
2,83 x
2000/YTD
Post Lehman
Life
Deal value / Net result
25,00 x
0,70 x
0,56 x
21,10 x
20,00 x
15,28 x
15,00 x
0,24 x
0,22 x
13,13 x
11,46 x
10,00 x
5,00 x
0,00 x
2000/YTD
Post Lehman
Non-life
2000/YTD
Post Lehman
Life
2000/YTD
Post Lehman
Non-life
2000/YTD
Post Lehman
Life
Source: PwC analysis on Mergermarket data
The Italian Insurance Market • October 2014
PwC
30
Section 5 – M&A activity
Non-life M&A multiples – Italy vs. Europe
Deal value / GWP
1,00 x
Deal value / Net result
0,97 x
0,96 x
18,00 x
16,44 x
0,90 x
16,00 x
0,80 x
14,00 x
0,70 x
12,00 x
0,60 x
10,00 x
8,67 x
0,50 x
8,00 x
0,40 x
6,00 x
0,30 x
4,00 x
0,20 x
2,00 x
0,10 x
0,00 x
0,00 x
2009-2012
Italy
Europe
2009-2012
Italy
Europe
Source: PwC analysis on Mergermarket data
The Italian Insurance Market • October 2014
PwC
31
The Italian insurance market in the
European context
The Italian Insurance Market • October 2014
PwC
32
Section 6 – The Italian insurance market in the European context
The Italian insurance market in the
European context
Key Messages
FY12 European key-data*
European insurance market GWP
€1,094bn
o/w Life: €643bn
Non-life: €451bn
European insurance market
average expenditure €1,843
o/w Life: €1,083
Non-life: €760
Italian insurance market GWP
9.6% of European Insurance market
(life insurance 10.8%; non-life insurance
7.9%)
Italian insurance market average
expenditure €1,728
o/w Life: €1,146
Non-life: €582
Italian insurance market
penetration (as GWP on GDP) 6.7%
(vs. 7.0% in FY11)
o/w Life: 4.4% (vs. 4.7% in FY11)
Non-life:2.3% (vs. 2.3% in FY11)
* 2012 figures, which are the latest available data at
the issuance of our report
Strengths
• One of the top four European Insurance Markets by GWP
• An improved macroeconomic environment and less market volatility, recession is
forecast to halt in 2014 (+0.5% GDP growth)
• Strong liquidity position of Italian insurers compared to other European
competitors. In 2013 the available solvency margin, even if lower than 2012, was
almost double of the regulatory requirement
• Strong demand for traditional products
• Italian life insurance market is expected to over perform in 2014 confirming the
rebound achieved in 2013 (+22.1%), after the negative performances recorded in
2011 and 2012
Challenges
• Italian non-life market performance is still driven by the negative motor TPL trend,
which is not forecast to improve during 2014 (-6%)
• Average tax rate on premiums (26%) is higher than the European benchmark (19%)
• The reduction in claims costs occurred over the past years is forecast to perform a
“U-turn” in 2014 with a negative impact in terms of profitability
• Aggregators have been gaining an increasingly wider distribution role in the
European insurance market, mainly in the motor business. Given a market share of
just 2% in Italy, significantly lower than the penetration within the other main
European countries, potential upsides are foreseen
The Italian Insurance Market • October 2014
PwC
33
Section 6 – The Italian insurance market in the European context
European insurance market
2012 Life and non-life GWP and GDP per capita
GDP per capita
3.500
United Kingdom
GWP - Life (€)
3.000
The Italian market shows high growth potential as a result of:
(i) low premium rate per capita both in life (€1.2k) and nonlife (€0.6k) business
2.500
2.000
France
(ii) historical low penetration rate of life insurance sector
despite the high saving rate of Italian citizens (9.4% in 2013)
Italy
1.500
Germany
1.000
Netherlands
500
Spain
-
-
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
GWP - Non-Life (€)
Source: PwC analysis on Insurance Europe data
2008/2012 Life and non-life direct GWP
Life market
Non-life market
247
250
183
200
200 207
€ billion
61,7 63,4
150
100
92
118 126 110
105
36,7
54,6
65,4
179 178 182
165 171
67,8
54,7 61,2 63,9
88,5 91,3 94,2
84,9 86,2
35,9
79
36,4 35,4
37,4
50
60,8
190 181
143,8
124,1
122,4 137,9
81,1 90,1 73,9 69,7
-
112,9
-
242
207 213
61,3 204
68,4
78
79
75
59
52,1 53,3 56,3 56,8 56,2
79,6 85,2 90,4 86,8 87,3
-
78
-
26,4 24,4 21,6 21,9 19,0
61
56
60
185,7
56
149,2 145,7 149,6
173,3
31,8 32,1 29,0 29,8 29,4
-
27,5 29,1 27,3 29,7 26,6
-
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
Italy
France
Germany
Netherlands
Spain
United Kingdom
The Italian Insurance Market • October 2014
PwC
Source: PwC analysis on Insurance Europe data
34
Section 6 – The Italian insurance market in the European context
European insurance premiums penetration
2010/2012 Ratio of life premiums to GDP
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
8,9%
9,0%
8,4%
7,4%
6,2%
5,8%
5,6%
4,7%4,4%
3,5% 3,3% 3,3% 3,7%3,7% 3,2%
Italy
France
Germany
FY10
2,6% 2,8% 2,6%
Netherlands
FY11
In 2012 the ratio of non-life premiums fell to 1% excluding
Motor TPL. Under-insuring represents a volatile factor for
the Italian economy and is mainly due to the local
regulation framework which hampers efficient
partnerships between the public and private sectors
(healthcare, supplementary pension)
Spain
United
Kingdom
FY12
Source: PwC analysis on Insurance Europe data
2010/2012 Ratio of non-life premiums to GDP
2010/2012 Ratio of Non-life premiums to GDP (Motor TPL excl.)
12%
12%
9,6% 9,5% 9,4%
10%
10%
8%
8%
6%
4%
8,8% 8,7% 8.7%
6%
3,3% 3,3% 3,3% 3,6% 3,5% 3,5%
2,3% 2,3% 2,3%
2,8% 2,8% 2,9%
3,6% 3,6% 3,5%
2%
4%
2,3% 2,3% 2,4%
2,8% 2,7% 2,7%
1,8% 1,8% 1,9%
2% 1,0% 1,0% 1,0%
0%
2,7% 2,5% 2,5%
0%
Italy
France
Germany
FY10
Netherlands
FY11
FY12
Source: PwC analysis on Insurance Europe data
The Italian Insurance Market • October 2014
PwC
Spain
United
Kingdom
Italy
France
Germany
FY10
Netherlands
FY11
Spain
United
Kingdom
FY12
Source: PwC analysis on Insurance Europe data
35
Section 6 – The Italian insurance market in the European context
Distribution channels
2011 Breakdown of life GWP by distribution channel
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
3%
3%
3%
19,8%
73,1%
61,0%
1,0%
16,4%
12,0%
7,0%
9,6%
Italy
24,4%
49,8%
Direct Writing
3,4%
Germany
Agents
Broker
73,6%
69,0%
8,4%
23,0%
17,0%
France
77,0%
17,9%
13,1%
8,5%
6,8%
Netherlands
Spain
Bancassurance
Italian, French and Spanish life business markets remain
dominated by traditional distribution channels, such as
bancassurance (73% in Italy)
Agents network led the distribution model in Germany with
brokers with brokers playing a prominent role in the United
Kingdom and Netherlands
United
Kingdom
Other
Source: PwC analysis on Insurance Europe data
2011 Breakdown of non-life GWP by distribution channel
Networks of agents, in the Italian non-life business,
3,6%
2,0%
3,6%
7,1%
100%
represent c. 82% of total premiums. Only the German
6,1%
11,0%
8,0%
90%
9,7%
insurance distribution model is comparable to the Italian
80%
42,0%
18,0%
25,5%
25,0%
70%
market with agency networks representing c. 61% of total
60%
premiums. Direct writing is the main channel in Netherlands,
34,0%
50%
81,6%
whilst in France 69% of total GWP were equally distributed by 40%
35,5%
60,5%
30%
58,0%
agents and direct writing (c. 35% for direct writing and 34%
20%
35,0%
for agents); the UK’s distribution model is led by brokers
22,8%
10%
6,8%
8,2%
56,2%
5,0%
24,2%
4,3%
0%
Italy
France
Direct Writing
The Italian Insurance Market • October 2014
PwC
6,4%
Germany
Agents
Netherlands
Broker
Spain
Bancassurance
United
Kingdom
Other
Source: PwC analysis on Insurance Europe data
36
Section 6 – The Italian insurance market in the European context
Average GWP per insurance company
2010/2012 Number of insurance companies
Italy ranks first among top 6 European Countries with
average GWP per company of €447m, due to a highly
concentrated domestic market (235 companies in 2012)
1.247
1.213
United Kingdom
1.314
Spain
Netherlands
270
279
287
210
227
On the other hand the UK is the most diluted market in
Europe with 1,247 companies sharing c. €242bn of GWP
(avg. of €194m GWP per company)
FY12
263
FY11
570
Germany
578
FY10
582
405
France
Italy
434
441
235
239
242
Source: PwC analysis on Insurance Europe data
2010/2012 Average GWP per insurance company
600
520
500
461
447
470
437
446
€ milion
400
307
308
319
347
358
296
300
196
214
200
208
157
176
194
100
Italy
France
Source: PwC analysis on Insurance Europe data
The Italian Insurance Market • October 2014
PwC
Germany
FY10
Netherlands
FY11
Spain
United Kingdom
FY12
37
Section 6 – The Italian insurance market in the European context
Investments portfolio
2007/2011 Breakdown of investments
100%
90%
80%
11,8%
13,3%
12,8%
13,4%
14,0%
10,3%
12,0%
11,9%
10,4%
10,8%
39,8%
40,1%
40,4%
41,6%
3,7%
3,1%
3,2%
3,0%
31,2%
32,1%
32,6%
30,5%
FY08
FY09
FY10
FY11
70%
60%
35,1%
50%
3,9%
40%
30%
20%
38,9%
10%
0%
FY07
Shares
Real Estate
Bonds
Loans
Other
Source: PwC analysis on Insurance Europe data
While the weight of investments in real estate and loans
have remained stable over the 2007-2011 period, European
insurance companies have shifted part of their investments
from shares to bonds (30.5% and 41.6% respectively in 2010
vs. 38.9% and 35.2% in 2007)
France, with a CAGR08-12 of 7.2% ranks first for growth in
its investments portfolio (€1.86tn in 2012), closely followed
by UK (€1.80tn) and Germany (€1.55tn), while Italy, highly
detached from the other top 3 Countries, accounts €0.53tn
of investments
2008/2012 Investments portfolio
Life market
1.86
1.69 1.67
0.20
1.59
2.0
1.41 0.18 0.18 0.18
€ trillion
1.5
1.55
1.49 1.46
1.35 1.40
1.27 1.30
0.16
0.11 0.09
1.80
1.60 1.56 0.10
0.11 0.09
0.68
0.59 0.62
0.58 0.57
1.0
0.5
Non-life market
0.52 0.51 0.53
0.43 0.49
1.24
1.41 1.50 1.49
1.66
0.07 0.07 0.08
0.08 0.08
0.36 0.41 0.44 0.44 0.45
1.38 1.37 1.49 1.47
0.34 0.36 0.39
0.29 0.31
0.87
0.69 0.73 0.77 0.79
1.70
0.19 0.22 0.18 0.19 0.20
0.02 0.03
0.02 0.02 0.02
0.05 0.05 0.03 0.03 0.04
0.27 0.29 0.32 0.34 0.36
-
0.14 0.16 0.15 0.16 0.16
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
FY08 FY09 FY10 FY11 FY12
Italy
France
Germany
Netherlands
Spain
United Kingdom
Source: PwC analysis on Insurance Europe data
The Italian Insurance Market • October 2014
PwC
38
Our contacts
PricewaterhouseCoopers SpA
Via Monte Rosa 91
20149 Milano
T: +39 02 7785 372
F: +39 02 7785 358
M: +39 348 1565344
[email protected]
www.pwc.com/it
PricewaterhouseCoopers SpA
Via Monte Rosa 91
20149 Milano
T: +39 02 7785 951
F: +39 02 7785 358
M: +39 348 1506347
[email protected]
www.pwc.com/it
Emanuele Grasso
Marco Falchero
Financial Services
Partner
Financial Services
Director
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