Legislative changes, industry consolidation and ongoing economic difficulties are changing the landscape of Italy's general insurance market. Non-life insurers are focusing on achieving technical profitability after some challenging years and an increasingly volatile investment environment.
The premium rating environment is improving in 2012, and the market is expected to show an overall underwriting profit in 2013.
"The motor segment, which accounted for 57 per cent of non-life premiums in 2011, was the key contributor to renewed growth for the non-life sector, as premiums for motor third-party liability and motor physical damage increased", said Sam Dobbyn, associate director of analytics at AM Best. "Insurers have been attempting to increase prices in 2012, although to a lesser extent than in previous years."
A report by AM Best said that the Italian non-life market is likely to face a number of challenges, including recent legislative changes and the impact of the eurozone crisis. Italy's weak economy will continue to result in lower household spending and cuts in government expenditure.
Arianna Brina, associate financial analyst at AM Best, said: "The insurance sector was exposed to high levels of suspected fraud and claims even before Italy's economic downturn, and these continue to impact loss ratios.
The report also examines the potential consequences of a successful completion to the proposed four-way merger involving Unipol, Fondiaria-Sai, Premafin and Milano Assicurazioni to create a rival to Assicurazioni Generali.
Yvette Essen, report author and director of industry research for Europe and emerging markets at AM Best, said: "With three major players set to dominate the market after the merger, Allianz remaining the third-largest non-life insurer, the insurance industry is looking for stronger governance from a new insurance regulatory body to protect the interests of smaller participants".
AM Best press release © A.M. Best Company, Inc.
AM Best full report © A.M. Best Company, Inc.
© Incisive Media Investments Limited
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