Insurance Review | April 2022

Behind the recent banking risiko (today sadly frozen by the conflict in Ukraine) is a much bigger match: the match of protection.

At the risk of sounding repetitive and quite pedantic especially to the readers of Insurance Review, it should be noted that Italy currently has the largest potential market for insurance policies. In fact, our Country notably suffers from the well-known phenomenon of underinsurance, today endemic and persistent.

Two elements have become a mantra of sorts, a mantra which however remains for now completely ineffective: only one Italian out of ten is adequately protected from the most basic risks (civic liability, health, and life) and only one Italian out of four has insured the only real asset they own, their home.

Beyond such unexplored land are the legitimate appetites of banks, aggressive financial experts and also a few insurance companies, at least those that have finally awakened from the slumber of RC Auto policies.

In a market driven by offer as the insurance market, only one suspect remains: the offer itself. Of course, self-absolution is easy as it is blaming the Italians’ lacking financial culture. While this is true, the cause rests with those who dominate, or rather, used to dominate the market: insurance companies.

The same insurance companies that, with few exceptions, seem to be experiencing an internal fight with their distributors – the agents – sadly confirmed by their progressive decimation.

This explains, for example, the current fight for the control of Generali, but also the creation of the fourth banking center under the protection of UnipolSai.

UnipolSai, currently leading shareholder of BPER, acquired the segment of UBI network sold by Intesa Sanpaolo because of antitrust regulations. UnipolSai has then acquired Carige and currently aims at consolidating its influence in Popolare di Sondrio in order to widen their distribution power on the bancassurance front.

On these fronts, the protagonists are “big shots”: Nagel and his Mediobanca; Leonardo del Vecchio, head of the only Italo-French optics manufacturing giant EssilorLuxottica; Francesco Gaetano Caltagirone and Carlo Cimbri, with his Unipol, which has then become UnipolSai, under the unfaltering direction of Piazzetta Cuccia, with the subsequent fall of the Ligresti family.

Intesa Sanpaolo remains the most ecumenical of all banks, led by an enlightened and visionary manager, Carlo Messina. Intesa Sanpaolo has made a winning choice, that is creating within the company itself the first insurance company in the non-auto P&C insurance field in Italy.

The other protagonist of the old Milan derby, UniCredit, has endured the treatment and diet imposed by Mustier, who has the merit of having saved UniCredit from the abyss; at the same time, this has also inevitably rendered its path more difficult, with the sale of FINECO, a valuable company masterfully led by Alessandro Foti, and the sale of Pioneer (bought by the Americans from Fabio Innocenzi, then at the height of his splendor) to the French of AMUNDI.

UniCredit does not feature internal products producers or insurance companies: instead, Andrea Orcel’s strategy consists in strengthening the relationship with a very valuable partner like Allianz, a long-lasting engagement born at the time of Credito Italiano and Ras.

Of course, we cannot ignore Banca Monte dei Paschi di Siena, the historical Italian credit institution funded in 1472, currently the oldest bank still in business, the longest running worldwide (touching wood).

In March 2007, Banca Monte dei Paschi di Siena signed a strategic partnership based on an agreement in the field of life, damage, and supplementary social security bancassurance with the French giant AXA. The partnership has been renewed until 2027, thus turning into a veritable wedding.

But with penalty: among the many commitments weighing on the shoulders of possible buyers or sellers of Banca Monte dei Paschi di Siena there is a reimbursement worth one billion euros to be paid to the French insurance partner. Nothing shocking, since at the time of the State bailout, Banca Monte dei Paschi di Siena renegotiated the multi-year contract of bancassurance with the French giant, which then invested significantly in the bank.

In order to underline the bond between banks and insurance companies, it is enough to remember that, at the time of the agreement, Marco Morelli was the Deputy General Manager of Banca Monte dei Paschi di Siena. He then returned in Siena as CEO of Gruppo Axa between 2016 and 2020 and from 2020 to the present.

It is not news that top managers should move between banks and insurance companies. One need only think of Mario Greco, today CEO of Zurich, or Sergio Pietro Ermotti, former CEO of UBS, today President of Swiss Re.

The “change of control” penalty is a rule when it comes to bancassurance agreements. One need only think of the Cattolica Assicurazioni-Banco Bpm partnership and of the disorder that followed.

Banco BPM and Cattolica Assicurazioni called a truce one year ago, when they claimed that they had “reached an agreement, overcoming their respective divergences and defining the terms and means of adaptation and continuation of the partnership in the field of bancassurance, as well as their respective exit rights, thus combining the respective interests and taking into account the changes in the economic context”.

By the way, the agreement reached by Banco BPM and Cattolica stipulates “the award to Banco BPM of an early exit right from the partnership, should Banco BPM waiver the call”. So, no certainty in tomorrow. 

Banks and insurance companies seem to entertain a complex relationship, sometimes even incestuous, which explains the risk of losing sight of the market and the end client if we focus too much on internal power fights.

A less intricate situation can be found in other banks, younger, simpler, more dynamic and, for this reason, less “politicized” and complex to lead. Today, they represent a model of undisputable success of the happy marriage between protection and investments.

We are talking about financial networks and, in particular, those, among the main ones, with a stronger insurance vocation: Allianz Bank Financial Advisor, BNL BNP Paribas Life Banker and Banca Mediolanum.

Under the direction of Giacomo Campora and Paola Pietrafesa respectively, Allianz Italia and Allianz Bank Financial Advisor are fulfilling the dream of every bank and insurance company: the Casa Allianz project, which brings together agents and financial advisors in the promotion of stand-alone insurance products or insurance products in combination with other kinds of investment products.

BNL BNP Paribas Life Banker, the financial network born in 2014 under the guidance of Ferdinando Rebecchi, has adopted the bancassurance model thanks to BNP Paribas Cardif, pioneer and leader in Italy of bancassurance retail. Their former CEO, Isabella Fumagalli is today leading the Private Banking and Wealth Management sections of the bank.

Another example of how protection and investments can go hand in hand is Banca Mediolanum, funded by the dear departed Ennio and led with great expertise and vision by Massimo Doris, who has been working side by side his 5.000 Family Bankers in addition to over 200 Protection Specialists, who assist financial advisors and their clients on the protection front.

So, we can say that, in the field of bancassurance, what has been so far described is nothing more than the beginning of a new adventure. The best is yet to come.

Nicola Ronchetti