Insurance Daily | February 2021

In Italy, there are over 4.5 million companies that hire over 17 million people; they are, for the most part, micro businesses. 

Small and medium-sized businesses (or PMIs) hire over 4 million people – their turnover is worth about one trillion euros, which represents 14% of the Italian GDP. 

Italy is led by PMIs as well as family-run micro businesses. These businesses represent the way for a new Italian Renaissance. In fact, over six hundred years ago, artisan workshops fostered Michelangelo, Brunelleschi, Raffaello, Tiziano thanks to enlightened patrons, leading the way out of the Middle Ages. 

Today, the role of enlightened patron rests with our leaders, large banks, insurance companies and financial professionals, bankers, lawyers, accountants and brokers. 

The pandemic is going to exhaust and downsize the system of micro and small businesses in Italy. In order to start over, the system needs investments and protection. 

Now more than ever, banks and insurance companies have a pivotal role in the re-launch of the country. 

Italian entrepreneurs tend to surround themselves with several professionals – generally, about eight. However, they then tend to take important decisions alone. 

Accountants, lawyers, notaries, bankers, financial advisors, insurance brokers, chief financial officers occupy the stage of Italian businesses with no direction other than that of the entrepreneur. 

This characteristic may look like a weakness of our entrepreneurial system when it is, in fact, a strength. 

Undoubtedly, the pandemic is going to downsize several sectors; however, many small businesses will eventually start over. 

For this reason, entrepreneurs will need skillful professionals able to lead them through the world of credit and special finance (Corporate and Investment Banking, Merger & Acquisition) and to protect their investments and human capital.

In this context, the role of the insurance broker – preferred interlocutor of enterprises and entrepreneurs – will be pivotal. The insurance broker needs to face, together with the entrepreneur, issues which cannot be overlooked anymore. 

Small and medium-sized businesses hire 82% of workers and represent 92% of active businesses. They are usually managed by one or two key figures, which play a fundamental role in the company. 

They may be one of the funding members, the chief administrator, a director, but also a business manager with a valuable portfolio, or a specialist with unreplaceable skills. So, it is quite astonishing that less than 5% of PMIs has considered a Key Man Insurance Policy and less than 1% has an active one. 

The policy is tax deductible and, on average, with 3 thousand euros the insured capital reaches 1 million. If not now, when?   

Nicola Ronchetti