home / Archivio / Fascicolo / I potenziali rischi per le compagnie assicurative italiane nell'attuale scenario macroeconomico ..

indietro stampa articolo indice fascicolo leggi articolo leggi fascicolo

I potenziali rischi per le compagnie assicurative italiane nell'attuale scenario macroeconomico globale

Alessio Maria Musella, Alessio Maria Musella is Ph.D. Candidate in Accounting, Management and Business Economics at University of Chieti-Pescara “G. D’Annunzio” in cooperation with University of Teramo

L’articolo propone un’analisi degli squilibri economici che caratterizzano le compagnie di assicurazione in uno scenario macroeconomico caratterizzato dalla presenza, per un periodo prolungato, di tassi di interesse bassi o negativi. Storicamente, le variabili macroeconomiche hanno sempre influenzato le attività di intermediazione finanziaria delle compagnie di assicurazione. Per questo l’attuale scenario economico può fornire induttivamente agli investitori una panoramica delle tendenze di mercato, guidandoli nelle loro scelte di investimento. In questo lavoro, ad un’analisi macroeconomica si accosterà una teoria microeconomica per approfondire lo studio delle principali variabili che hanno determinato l’instabilità dello scenario assicurativo internazionale odierno. L’obiettivo è quello di evidenziare gli effetti economici avversi legati alla prolungata presenza di tassi di interesse negativi e, attraverso due casi studio, Generali SpA e UnipolSai SpA, di evidenziarne l’impatto sulle compagnie di assicurazione.

PAROLE CHIAVE: assicurazione - tassi interesse negativi

Potential risks for Italian insurance companies in the nowadays global macroeconomic scenario

The paper proposes an analysis of the economic imbalances that characterise insurance companies in a macroeconomic scenario described by the presence, for an extended period, of low or negative interest rates. Historically, macroeconomic variables have always influenced the financial intermediation activities of insurance companies. For this reason, the current economic scenario can inductively provide investors with an overview of market trends, guiding them in their investment choices. In this paper, the macroeconomic analysis approaches a microeconomic theory to deepen the study of the main variables that have determined today’s international insurance scenario’s instability. The aim is to show the adverse economic effects linked to the prolonged presence of negative interest rates and, through two case studies, Generali SpA and UnipolSai SpA, to highlight their impact on insurance companies.

Keywords: insurance companies – negative interest rates 


Introduction - 1. A qualitative approach in the context of negative interest rates - 2. Research methodology - 3. The impact of negative interest rates on insurance companies - 4. Economic analysis of “Generali Assicurazioni S.p.A.” - 5. Economic analysis of “UnipolSai Assicurazioni S.p.A.” - Conclusions - Bibliography - NOTE


This work aims to explain how low-interest rates have had a rather considerable negative impact on insurance companies, especially in 2017 and 2018. The microeconomic approach was accompanied by a consequent macroeconomic analysis, focusing attention on the main variables that have influenced today’s financial scenario, to provide investors with an idea of ​​the disastrous effects of an economic nature, taking into account the inevitable impact of the global macroeconomic system on Italian insurance companies. This study also focuses on assessing how the individual parts of a life insurance contract can influence the outcome of the operation carried out in the presence of some critical changes in a macroeconomic scenario. Life contracts, covering a wide time interval, are more influenced by variables, especially the market interest rate (Braun et al., 2019). This paper supports the theory according to which insurers base their choices mainly on financial leverage and the risk resulting from a low-interest rate to maximise the company’s added value. It involves making the portfolio more efficient or, in some cases, riskier. However, an external evaluator cannot fully understand this situation, as information is needed that goes well beyond the financial statements content. Therefore, one of the aims of this paper is to provide investors with orientation paths aimed at more informed reference choices. Based on these premises, the paper proposes to analyse how negative interest rates impact the economic stability of insurance companies in the medium-long term and, above all, how the choices of investors, assuming that these are oriented by their expectations about the trend in interest rates, may in some way affect the solidity of the insurance institutions themselves. The aim is to show the adverse economic effects linked to the prolonged presence of negative interest rates and, through two case studies, Generali SpA and UnipolSai S.p.A., to highlight their impact on Italian insurance companies.

» Per l'intero contenuto effettuare il login inizio

1. A qualitative approach in the context of negative interest rates

The nowadays macroeconomic scenario is characterised by low nominal rates, especially in advanced economies. This trend began in the early 1980s and has continued to influence financial results and monetary policy effectiveness (Ferrero and Neri, 2017, 5). Short and long-term interest rates have achieved their most low level, particularly between 2000 and 2016. The macroeconomic environment is characterised by low nominal rates, with a decline that accelerated with the outbreak of the global financial crisis in 2007. However, focusing on the Eurozone, nominal and real interest rates, brief and extended term, are superficial by historical standards in all the leading advanced economies. In particular, analysing the global insurance scenario, the investment is suitable to increase the profitability of German life insurance companies assets primarily in the environment of low-interest rates in the capital market for fixed income titles (Wontke and Balleer, 2018). This trend does not exclusively depend on the expansionary monetary policy implemented. The fall in interest rates began globally as early as the second half of the 1980s, in conjunction with a prolonged decline in inflation and during a period of low macroeconomic volatility. The fall then became more pronounced after the outbreak of the 2007 global financial crisis. Comparing the European case to Asia, in recent studies, automatic linear modelling performed to test the proposed hypotheses revealed that the financial health of general insurance companies is significantly influenced by, respectively, current ratio, reference interest rate, inflation rate, and company size in different directions (Sugiharto et al., 2019). Particularly for the Eurozone, there are tangible shreds of evidence that the ageing of the population and the slowdown in total growth in factor productivity and human capital formation have triggered persistent downward pressure on interest rates. It is fundamental to mention empirical economic models to explain and support this theory at the same time. Empirical models suggest how the increase in the dependency ratio in the Eurozone countries can justify the reduction not only of economic growth but also of the real interest rate, which can at the same time contribute to exert significant downward pressure, even for the next few years (Ferrero et al., 2017). In this sense, an economic model linked to this macroeconomic scenario is “The [continua ..]

» Per l'intero contenuto effettuare il login inizio

2. Research methodology

This paper aims to demonstrate how, by measuring two insurance companies performance, it is possible to detect the damage caused by an unstable macroeconomic scenario characterised by low or negative interest rates. The approach aims to evaluate that a counter-productive, competitive environment had grown and, in the nowadays global macroeconomic system, a significant change in corporate culture was needed. The proposed analysis procedure is consisting of the case study’s analysis. The research investigates the two most important insurance companies performances in the nowadays Italian macroeconomic scenario: “Generali Assicurazioni S.p.A.” and “UnipolSai S.p.A.” because a few studies have also conducted more forward-looking analyses under the assumption of a continued and prolonged period of low-interest rates. While most of these studies on the impact of low-interest rates on insurers have been mainly qualitative, a few recent studies have quantitatively investigated the effects of low yields on life insurers performance. The studies all point to the likely negative impact that a protracted period of low-interest rates would have on insurers solvency position. In the following paragraphs, an analysis is conducted to gauge the impact of interest rate levels on Italian insurance companies financial performance over the period 2016-2018. I regress a measure of insurance companies profitability (measured by institution-specific return on assets) on the level and volatility of long-term interest rates (calculated as the ten-year sovereign benchmark bond yields) while controlling for other key driving factors of profitability, such as institution-specific developments in underwriting performance (here measured as annual growth in gross premiums written) as well as country-specific macroeconomic factors including real GDP growth and inflation. My approach proposes to assess the vulnerability of insurance sector business models across countries to a prolonged period of low-interest rates. Through an analytical approach, the aim is to assess whether Italian insurance companies have been able to adapt or not to the pernicious consequences of negative interest rates in the international macroeconomic scenario. The methodological approach analyses the two Italian insurance giants performance measurement, evaluating how the proposal of alternative insurance products has enabled [continua ..]

» Per l'intero contenuto effettuare il login inizio

3. The impact of negative interest rates on insurance companies

Special attention is paid by economists and investors to insurance companies, studying how their financial and equity structure affects governance decisions choices. Therefore, this paper aims to underline that an insurance company can be seen as a financial intermediary that collects resources from policyholders and reinvests them in a portfolio of assets. It would be necessary for the company to create a buffer between the level of expected remuneration of policyholders and the activities in which it has invested in such a way as to define its marginal profit (Grosen and Lochte Jorgensen, 2000, 37-57). In particular, interest rates influence companies assets and liabilities. Some researchers show how an insurance company can maximise the policyholder’s utility by setting the interest rate guarantee level in line with his preferences, developing a general life insurance model, taking stochastic interest rates, early default and regular premium payments account. In some cases, the best level for the interest rate guarantee is in general far below the maximum value typically set by the supervisory authorities and insurance companies (Braunet al., 2019), incorporating the interest rate risk with the problem studied under a stochastic interest rate model (Zhao et al., 2018). Using, for example, data from the financial statements filed by Uruguayan insurance companies, a recent research study estimated a translog cost function following the stochastic frontier methodology. The data set consists of quarterly balance sheet information from all Uruguayan insurance companies from 2005-2015. The authors explain that the average cost of inefficiency is 17.8%, and there is substantial heterogeneity across firms. The results show that an efficient insurance company’s annuity margin could charge to cover its administrative costs is eleven basis points over the market long-term interest rate (Dassatti and Lluberas, 2020). With this in mind, based on the hypotheses mentioned above, this paper intends to acknowledge the fact that medium-yielding assets, correlate with low-interest rates, can produce significant effects over a given period, and it represents the opportunity cost for investors, particularly shareholders. An increasing number of monetary policymakers have focused on the experiment, even though rates below zero can significantly reduce banks ability to inject liquidity into the market [continua ..]

» Per l'intero contenuto effettuare il login inizio

4. Economic analysis of “Generali Assicurazioni S.p.A.”

Since the fact that the purpose of this paper is to explain how low-interest rates have received a rather considerable negative impact on Italian insurance companies, especially in the 2017-2018 tax period, it is fundamental to outline the economic traits of the two leading companies of the Italian insurance sector: Generali S.p.A. and UnipolSai S.p.A. In economic terms, the Generali Group reported an operating result that grew, with an improvement in premium income profitability. The adoption of these strategies is because extremely low-interest rates – fueled by the ultra-expansionary monetary policies of central banks – have also produced negative implications. Among these are the problems created by global insurers, who cannot offset liabilities with bond returns. The consequence is that companies are increasingly convinced that it is essential to resort to alternative instruments to diversify the portfolio, such as private debt and real assets. A similar strategy has renewed the business model in two ways: 1. Through an internal reorganisation aimed at improving efficiency and operational performance. However, the greater rigour in selecting the markets to operate from a geographical point of view is emblematic, with a more selective intervention aimed at using exclusively in the most attractive markets to concentrate a more significant influx of resources. 2. Another pillar of the corporate strategy has hinged on innovation and renewal of the value proposition to current and potential customers, both through the computerisation and streamlining of company procedures and improving the custodian experience through the use of the most modern technologies. Starting from the hypothesis mentioned above that one of the most significant consequences of low-interest rates is that there has been a considerable shift in investment, it is important to underline that today shares have, in fact, become bonds, and the latter have become shares. Indeed, there is a real possibility that low rates will continue to exist for a long time, and that is why there is a great challenge in terms of investments in the world of bonds. Rates are set to remain low, and it is not excluded that there may be further reductions. For this reason, therefore, an essential element for the composition of the portfolio is the management cost. In a horizon of negative interest rates, the upstream selection concerning investments in insurance companies [continua ..]

» Per l'intero contenuto effettuare il login inizio

5. Economic analysis of “UnipolSai Assicurazioni S.p.A.”

The second case study analysed in this paper proposes to examine the impact of low-interest rates on the economic structure of another leading company in the Italian insurance sector, concerning the 2017-2018 tax period: UnipolSai S.p.A. In this case, a prolonged scenario of extremely low or negative interest rates is an event never experienced before. The scenario’s exceptional nature imposes new challenges on all economic operators, especially on life insurers, whose traditional business models must adapt to the new macroeconomic and financial conditions. Analysing the leading summary indicators of UnipolSai’s economic performance in 2017, an improvement was recorded compared to previous years. The net result went from 458.5 million euros at the end of 2016 to 577.2 million euros at the end of 2017. The strategic activity of 2017 saw UnipolSai as the protagonist of a project to rationalise the insurance sector, which resulted in numerous benefits in terms of consistency and effectiveness in the coordination, the organisational and operational activities insurance business. It is because UnipolSai, unlike the Generali Group, has been able to address better the problems associated with the presence of unconventional monetary policies and negative interest rates, offering low-risk insurance products. To be specific, the Project proposes to foster the development of an integrated multichannel offered model, aimed at taking into account the evolution of consumer behaviour and needs in a context of low-interest rates and below zero levels. The range of solutions dedicated to savings has been expanded by marketing new products such as “UnipolSai Investimento Garantito Extra”, which can be revalued with a Single Premium of Branch. Furthermore, the achievement of the Certification of Conformity of the products “Vita di UnipolSai” testifies to the Group’s customer orientation and to developing a trusting relationship with the latter through the construction of high-quality insurance products. In 2017, the Group’s management continued to focus on consolidating the functional machine, relations with the sales network and product innovation with particular attention to telematics. These considerations derive from an analysis of the leading performance indicators, which testify to a phase of improvement in profitability, especially regarding the Insurance [continua ..]

» Per l'intero contenuto effettuare il login inizio


This article is written with a specific purpose to provide a case study guide to research students of business and management disciplines specifically. Regarding the disclosure of non-financial information, which confirms the hypothesis of this paper, according to which the negative interest rates in the years 2016-2018 have led to a significant decline in the insurance companies various sectors, it is crucial the Law 254/2016.It obliges large companies, qualifying as “public interest entities”, to include in the Annual Management Report a non-financial statement (“NFS”) to facilitate the understanding of the business its performance and results, also referring to the principal risks deriving from it (environmental, social, personnel issues, respect for human rights, the fight against active and passive corruption). The two cases analysed in this paper, in particular, show how, after long periods of low-interest rates, their pervasive impact on insurance companies is indisputable. They affect savings, making it, in most cases, more challenging to accrue desired retirement funds. They lull governments into seemingly effortless debt financing, threatening fiscal sustainability and state-sponsored pension systems stability. They erode the financial health of corporate-sponsored pension plans. And they compress margins in the financial sector, which ultimately could undermine the delivery of broader financial services to our societies. To reinforce this conclusion, it is also fascinating the contribution of Fong and Vasicek by developing a risk-return optimisation problem for immunised life insurance portfolios. In their research, the M2 measure of risk for arbitrary changes of the term structure of interest rates is used for a bond portfolio with duration matched to a given liability horizon. The immunisation case becomes a “passive” strategy among a whole perspective of operational management decisions in which a partial risk minimisation exchanged for more potential returns (Boonen, 2017). In conclusion, through this hypothesis, my paper demonstrates how low-interest rates damage the Italian insurance companies stability and their relations with other international insurance institutions in the current global economic scenario. Through the supra mentioned analysis, in fact, as interest rates have declined, several senior executives referred to in-force management as a tool to help maintain [continua ..]

» Per l'intero contenuto effettuare il login inizio


ANNUAL REPORT 2016 – 123rd Financial Year, Banca d’Italia, Roma 31 Maggio, 2017. BARUCCI, E., COLOZZA, T., MARAZZINA, D. & RROJI, E. 2020, “The determinants of lapse rates in the Italian life insurance market”, European Actuarial Journal, vol. 10, no.1, 149-178. BLANCHARD O.J. 2012, “Macroeconomics, Global Edition”, Pearson. BOADO-PENAS, M.C., EISENBERG, J., HELMERT, A. & KRÜHNER, P. 2020, “A new approach for satisfactory pensions with no guarantees”, European Actuarial Journal, vol. 10, no. 1, 3-21. BOONEN, T.J. 2017, “Solvency II solvency capital requirement for life insurance companies based on expected shortfall”, European Actuarial Journal, vol. 7, no. 2, 405-434. BRAUN, A., FISCHER, M. & SCHMEISER, H. 2019, “How to derive optimal guarantee levels in participating life insurance contracts”, Journal of Risk Finance, vol. 20, no. 5, 445-469. BRYCZ M. 2012, “Keynesian and Monetary Approach to the Liquidity Trap – looking for cointegration evidence from 2008 – Crisis in the United States”, Journal of International Studies, Vol. 5, No 2, 18-29. BUSETTI F. & CAIVANO M. 2016, “Low frequency drivers of the real interest rate: a band-spectrum regression approach”, Bank of Italy, (Discussing Papers). CAMINO-MOGRO, S. & BERMÚDEZ-BARREZUETA, N. 2019, “Determinants of profitability of life and non-life insurance companies: evidence from Ecuador”, International Journal of Emerging Markets, vol. 14, no. 5, 831-872. CESARI, R. & MOSCO, V. 2018, “Optimal management of immunised portfolios”, European Actuarial Journal, vol. 8, no. 2, 461-485. EISENBERG, J. & KRÜHNER, P. 2018, “The impact of negative interest rates on optimal capital injections”, Insurance: Mathematics and Economics, vol. 82, 1-10. FERRERO G. & NERI S. 2017, “Monetary in a low-interest-rate environment”, Occasional Papers n.39, Bank of Italy, 5-31. FERRERO G. & GROSS M. – NERI S. 2017, “Secular stagnation, demographic developments and interest rates: an empirical investigation”, Bank of Italy, (Discussing Papers). GALIMBERTI F., [continua ..]

» Per l'intero contenuto effettuare il login inizio


» Per l'intero contenuto effettuare il login inizio

  • Giappichelli Social