Insurance agents and financial advisors united by the same fate

Insurance Connect | November 2020

Banks and networks of financial advisors are not content with just their supremacy over the industry of life insurance. Recently, Italian banks and networks have invaded the field of liability and accident insurance.

There are two main reasons. The most common reason is the spasmodic quest for new sources of revenue in a time when, challenged by negative rates and the MIFID2, financial gratification has given way to more and more constraints.

Another, perhaps more noble, reason is linked to the effort to build customer loyalty and to provide clients with all-round assistance. In fact, banks and networks know that protection and risk management may well go hand in hand. 

But, in the meantime, what are agents, subagents and insurance companies doing? Are they simply observing, unperturbed, the invasion of their territory? It is, admittedly, quite a small land. In fact, the presence of entirely unexplored regions to be conquered and cultivated reveals the fragility of the Italian insurance sector, especially when compared to other EU countries (first and foremost, France).

Of course, disparaging Italians for their poor education on the role and importance of financial protection could be quite legitimate in a market driven by offer. However, a healthy dose of self-criticism and a higher level of proactivity would be much more beneficial to any stakeholder and to the Country.

Agents, subagents and insurance companies tend to watch the invasion of the field of liability insurance with condescension and apparent detachment. They feel that their expertise will protect them from any risk. And this well may be the case. 

However, while the number of active agents is decreasing inexorably, in Europe the liability insurance market share held by banks has increased from 6% in 2011 to 18% in 2020. In addition, networks of financial advisors are becoming extremely successful in Italy, so much that their net revenues reached 22,4 billion euros (+30,4% as compared to 2019) in the first six months of 2020.

Of course, this is not a derby insurance agents vs financial advisors – the result would be quite predictable, anyway. The true challenge is bringing together insurance agents and financial advisors with the common goal of raising awareness on financial protection and risk management. 

Today, less than one Italian out of four has insured their house despite it being the only asset of 80% of Italian people. Why? In Italy, 15 billion euros are spent every year on adult care – 9 billion euros are spent on the employment of caregivers and 5 billion euros are spent on nursing home fees. And yet, we do not consider subscribing an insurance policy against the risk of losing self-sufficiency (Long Term Care). Why?

Insurance agents, with due exceptions, are used to welcoming clients who ask for risk insurance directly at their office. On the other hand, financial advisors go to their clients and offer investments with the possibility of adding a risk component covering the risk of losing part of the invested assets. 

To quote the Gospel of Luke, we may say that it is easier for a camel to go through a needle’s eye, than for agents to offer their clients a financial investment. Vice versa, networks of financial advisors and banks are ready to offer insurance policies. There are three emblematic examples. 

Intesa Sanpaolo was the first bank to showcase the slogan “Banca Assicurazione” on the windows of its branches, followed suit by other banks. Once again, Carlo Messina, CEO of Intesa Sanpaolo, stands out for his clear strategy and ability to build a team of enlightened managers (Stefano Barrese, Head of Banca dei Territori and Alessandro Scarfò, Managing Director of Intesa Sanpaolo Assicura).

Banca Mediolanum was the creator of a new figure – the Family Protection Specialist® – who joins the Family Banker® in the promotion of insurance policies. And, as anticipated by Massimo Doris, the numbers are mind-boggling.

Last but not least, there is Casa Allianz, a project that has become reality thanks to Giacomo Campora, CEO of Allianz Italia, and Paola Pietrafesa, CEO of Allianz Bank, together with her team. The project brings together insurance agents and financial advisors, working in teams that generate synergies and opportunities not only for the Company but also for clients. 

To quote a great philosopher, knowledge benefits from facts rather than from words (Pietro Abelardo 1079-1142).

Nicola Ronchetti