COVID-19 emergency

The impact of Covid on our business

Despite the persistence of the pandemic in 2021, we confirmed the Group’s strategy and contibued to implement several initiatives aiming at ensuring the achievement of the targets set, both financial and non-finacial.

The Group demonstrated its resilience, although the key markets of the Life business in Europe were significantly affected by the pandemic over 2021. New business slowed down as for traditional products, in line with the strategic objective to rebalance our Life portfolio. Unit-linked products continued the significant growth at the end of 2020, exceeding the pre-pandemic premium levels of the previous year already in the first months of 2021, and then continuing to grow in the following monthst, with a contribution from Italy, France and Germany. The resilience demonstrated in 2020 from underlying investment solutions to unit-linked products increased distributors' confidence in these solutions; this, along with product and underwriting strategies, accelerated their adoption.

Protection products reported good performance in terms of new business, driven by the growing need for insurance protection. In this regard, since the beginning of the pandemic we promptly set several initiatives in motion to support our customers, both financially and by launching new value-added services, ranging from the care of physical and mental well-being to remote medicine through, among others, Europ Assistance.

The Group confirmed premium growth in all the businees lines of the Property & Casualty segment, with different trends in the main markets where it operates. In continuity with 2020, it increased the range of products with new coverage and services, adapting contractual terms and conditions and improving, with extensive use of digital technology, the operating processes for underwriting policies and settling claims.

With reference to the loss ratio, we observed a recovery in the frequency of claims in the motor line, however lower than pre-Covid19 levels, following the reopening of economic activities and the consequent mobiilty. The average premium in the motor business recovered but remained under pressure due to competitive pressures.

The Asset and Wealth Management segment benefited from the positive performance of the financial markets following optimistic forecasts of post-pandemic recovery already as early as the second half of 2020, which resulted in a rise in assets under management as well as a strong recovery of commissions.

The extension of the product range, a more solid track record also for the products managed by boutiques, and the significant recovery of the financial markets boosted the rise in recurring commissions, together with the one-off contribution of the real asset business. In 2021, the disciplined approach to the management of operating costs continued.

The pandemic may have direct and indirect effects on underwriting risks.

The direct effects on the Life and Health underwriting risks regard the potential increase in claims paid on policies that provide death or health coverage; the indirect effects regard the potential need of customers for liquidity, generated by the economic crisis, which may imply higher surrender payments. In both cases, the impact observed on the Group to date has been fairly insignificant. To continue to effectively manage death or health risks, we adopt adequate underwriting processes that assess the health conditions and the demographics of the policyholder in advance. In addition to underwriting processes, we monitor changes in claims and, in this regard, we assess the lapse risk and mortality risk, including the catastrophe risk resulting from a pandemic event, using the Group’s Partial Internal Model.

The possible impact of the pandemic on P&C underwriting risks is represented by a possible increase in the reserving risk which, however, we monitor in terms of changes in claims and risk assessment through the Group's Partial Internal Risk Model.


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