8th October 2019

Bancassurance in Italy: An opportunity to improve banks’ profitability, says DBRS

DBRS expects banks to grow their life and non-life bancassurance activities in Italy. The prospects for the different markets are reviewed in a commentary entitled “Bancassurance in Italy – An Opportunity to Improve Banks’ Profitability”.

The key highlights:
• Bancassurance provides Italian banks with an opportunity to diversify their revenue base and improve profitability in a challenging operating environment.
• The bancassurance channel has a very strong position in the Italian life insurance market with over 60 per cent of total gross written premiums.
• This contrasts with the non-life market where bancassurance accounts for less than 7 per cent of the market.

Bancassurance started in Italy in the early 1990s following deregulation in the previous decade. Nevertheless, “the exponential growth of the bancassurance channel in Italy responded not only to changes in the regulatory environment but also to the pressures in the banking industry as a consequence of the sharp decrease in profitability of its traditional lending business, couple with changes in demand for financial services due to the aging population,” said Marcos Alvarez, Senior Vice President.

According to Nicola De Caro, Senior Vice President: “The outlook for the Italian non-life bancassurance sector remains positive as the penetration level in the Italian non-life segment at 1.9 per cent of Italy’s gross domestic product, is still significantly below the average of 4.5 per cent for the OECD countries, with increasing demand in health insurance and home protection.”

Read the full report: https://www.dbrs.com/research/351168/dbrs-bancassurance-in-italy-an-opportunity-to-improve-banks-profitability