In 2016, the Italian insurance market GWP fell by 9% to €134bn, mainly driven by life business, which declined by 11% to €102bn (€115bn in 2015), albeit net inflows were positive (€39bn).
Underwriting results rose by 7.5% to €6.9bn led by the life business which represents 54% of underwriting result. This line improved in terms of investment profits (€16.7bn, +4.5% vs. 2015).
Investments (€741bn, +7.0% vs. 2015) generated net profits equal to €21.3bn with a 3.3% ROI (3.4% in 2015).
Although residual in terms of GWP, health insurance recorded a double digit growth (+10%) and can be considered the non-life rising star. The Italian market looks underpenetrated when compared to similar countries in Europe: in Italy private ‘out-of-pocket’ spend is 19% of medical treatment costs (vs. 9% in France).
The average Italian market Solvency II ratio was 221% (232% in 2015), of which life business was 210% and non-life 175%; Insurance companies of a bigger size (e.g. composite insurers) reported an average 230% ratio.
Over the next few years insurers will focus on the implementation of IFRS 17 that should guarantee comparability of statements across countries by 2021 (common reporting standards).