We challenge the common wisdom that the income elasticity of insurance be higher, ceteris paribus, in developing countries (the so-called S-curve hypothesis). Focusing on non-life insurance, we show that the available evidence is contradictory and heavily dependent on methodology. Based on a recent approach to consistent inference on the income elasticity of insurance, we show counterexamples to the theory. Although not supporting it in general, we argue that it could still be relevant for explaining the behaviour of particular lines of business.

We extend the standard model of optimal insurance to partial or total borrowing, describing the negative effect of the borrowing- lending spread on demand. Our evidence shows that demand for non-life insurance is in fact decreasing with the interest rate on borrowing. We conclude that credit conditions are a significant driver of non-life insurance development, and an important limiting factor in the particular case of Southern Italy.

The development of Italian private pension plans shows little progress, in spite of generous fiscal incentives. We show that few subjects contribute and even fewer fully exploit the fiscal advantage. Our analysis underlines that in evaluating fiscal incentives Italian savers are influenced by a wide range of heuristics. So there is room for skillful public and private decision makers to reach the goal of increasing the private pension pillar taking advantage of the way people really take their decisions.

This paper analyses the impact of the evolution of the regulation dealing with systemically important insurance groups, using an event study methodology. The results show that investors were able to detect which companies were to be designated well ahead of the publication of the list. Most important, after an initial positive reaction, consistent with the expectation of a “Too-big-to-fail” implicit subsidy, the disclosure on how the capital charges for systemic insurers will be calculated led to sizeable negative abnormal returns for the entities concerned.

25 years after a seminal paper, we reassess the income elasticity of non-life insurance by means of homogeneous and heterogeneous versions of the Common Correlated Effects estimator, reversing the findings from the earlier literature. The evidence supports the existence of a cointegrating behaviour between insurance consumption and GDP and the view of non-life insurance as a normal good.

We assess the role of expectations on pension income and financial literacy in the decision to join a pension fund. The results confirm past evidence on the role of income and education and find a strong role played by financial literacy. We therefore provide further evidence for the role of public powers in enhancing participation by providing information and financial education.

An innovative empirical approach to the long-standing research question on the determinants of life insurance development is proposed and applied to the peculiar Italian situation in order to shed light on the determinants of aggregate life insurance consumption.

Insurance market trends in Europe are positively shaped by the peculiar economic situation characterizing the euro area. A rearrange towards products where the return volatility risk is shifted to the policyholder is taking place all over the life industry. Non-Life lines were responsible for keeping the insurance sector afloat, both from the point of view of turnover and from that of profitability. In 2018 the overall premium income in the italian insurance industry started to grow again (+2.7%) amounting to more than 140 billion. Premium income in the life segment amounted to almost 106 billion posting a 2.7% increase (considering gross direct written business). Hybrid policies remain the most important products in terms of premiums income, since they ensure capital protection and higher returns provided that stock market performance stays in positive territory in the mid-long run. By contrast, unit-linked policies decreased their weight but this has been someway -counterbalanced by the increasing demand for traditional policies notwithstanding the problematic financial context of low yields. The non-life insurance sector showed growth for the second year in a row and turnover was +2.7% driven by the good performance of the motor sector (+1.5%), after the bad results of the last six years, and by the increase in MTPL premiums (+0.6%). The non-motor segment showed a steady increase of +3.7% as against the +2.7% posted in 2017 and +1.5% in 2016. Generali Group confirmed its market leadership in terms of global business, with a premium income of €24,202 million and a 16.8% market share.

The growth of gross written premiums in 2017 was significant in the Central and Eastern European countries, while it was negative or stable with respect to the previous year in the Western countries. In 2017 the overall premium income in the Italian insurance industry declined for the second year in a row (-2.2%) amounting to almost 140 billion. Premium income in the life segment amounted to 103 billion suffering a 3.4% decrease (considering gross direct business written by Italian companies). The current low interest rate environment continued to negatively affect the appeal of guaranteed products and, also in the light of the stringent requirements imposed by Solvency II, insurance companies have shifted the product mix in favor of class III policies and multiline (hybrid) products. After five years of disappointing results, the non-life lines grew by 1.2% but negatively affected by the poor trend in the motor sector (-0.7%), due to the strong competition between operators favored by the good technical results, driven by low claims frequency (in line with European countries) and by a contraction, albeit slight, in the average cost of claims. Generali Group confirmed its market leadership in terms of global business, with a premium income of €23,165 million and a 16.6 % market share.

In most of the core European markets the trend of the life insurance was mainly negative in 2016, with the only notable exception of Spain and Hungary, given that the macroeconomic scenario continued to be characterized by very low bond yields. The shift towards Unit linked products was not able to recover the falling down of traditional products and now insurers are mainly pushing for hybrid products. Non-life insurance premium collection posted a far better result than the life one, in line with the previous year, thanks in particularly to the good performance of the motor insurance where we are seeing a recovery after years of low profitability.

Economic growth in Euro area continued but remained frail sustained by the recovery of the internal demand with positive impact on insurance sector in almost all European Countries. The macroeconomic scenario characterized by very low bond yields, especially in the core European markets, was still a burden for the life insurance; the only notable exception was Spain where gross written premiums, after years of a negative trend, increased versus the previous year thanks to the performance of the risk business (+7.6%) driven by the recovery of the housing market. The new wave of uncertainty that affected financial markets at the end of the year re-oriented life insurance demand, previously focused on unit linked products, towards traditional product with guarantees.

During 2014 the improvement in financial conditions created opportunities for the insurance business in most of the European markets, where premium income and profitability were broadly on the rise. In the Euro area, life insurance premiums experienced substantial growth in several markets, maintaining and even overtaking the good performance of 2013. However, there are two exceptions to this trend: Germany, where growth slowed down and where the persistence of a low interest rate environment negatively affected the appeal of guaranteed and may represent a threat to companies financial stability, and Spain, where there was only a moderate level of growth in the life premiums in contrast to substantial contraction in past year. Low investment return combined with Solvency II Requirements have rapidly shifted the product mix in favor of Unit Linked policies.

In 2013, the European insurance industry posted overall positive results. Life insurance premiums increased while the performance of non-life insurance was on average in line with that of 2012. In Italy, in 2013, total turnover was up 13.3%. In particular, life premiums (direct Italian business) grew by 22.5%; new business was up 31.3%.

Market uncertainty and volatility heavily affected the performance of insurance industry in 2012. Life insurance turnover continued to contract in many of the main European markets due to the same factor which depressed premium growth in 2011, namely low household savings ratio and the unappealing level of guaranteed yields, especially in comparison with those of bank products, which were also supported by aggressive marketing strategies. These factors are clearly at play in the Italian market, where premiums were down 3.8%. Much of the fall was recorded in the first part of the year: the rebound in confidence following ECB action in September boosted collection in the final quarter of the year.

In 2011 the performance of the Italian insurance industry was heavily affected by the difficult financial and economic situation in Europe. Premium income in the life sectors dropped all over Europe compared with the previous year, as the difficult economic conditions facing families seriously hindered their propensity to save. On top of that, the decline in guaranteed returns due to pre-crisis low interest rate environment, combined with the effect of strong competition from other savings products, especially those distributed by banks, contributed to further wors-en the life insurance performance. This trend was apparent on the Italian market, where life premium income fell by 12.3% (reaching 18.3% if we take into account direct Italian premium income) and where bancassurance channel recorded an over 25% decline in premiums .

The stabilisation of the financial markets during 2009 promoted the growth The strong recovery of premium income recorded in the life sector in 2009 continued on all the main markets in 2010. Growth was again driven by low risk products which offer a minimum guaranteed return; demand for these products benefited from a rather steep yield curve and the volatility of the stock markets, which in many countries penalised the growth of linked products. The Italian market was once again the most dynamic, with 9.2% growth.