A hitherto underestimated threat weighs on Italy's dramatic economic and social situation: "The real risk of the production system is called underinsurance", says the President of AIBA (Italian Association of Insurance and Reinsurance Brokers), Francesco G. Paparella, launching his alarm during the conference "The new frontiers of insurance: the broker to protect people and companies" which is taking place today in Rome. “Less than 20% of Italian companies, against 80% of German companies – underlined Paparella – have an Indirect Damage policy which protects against economic losses resulting from a production stoppage. There are only 4 companies that have Pollution Liability coverage in place out of a potential 3 million. The professionals who have taken out a Professional Liability policy are a small minority. And also The number of homes insured against damage from natural catastrophes is absolutely marginal”.
The closures and drastic drops in turnover of companies, the increase in unemployment, cuts in public spending and the reduced saving capacity of families have significantly increased the sense of uncertainty of Italians. “We are in an emergency situation. The long duration of the recession - observes Paparella - has now affected the assets of Italian businesses and families and made everyone more fragile in the face of the consequences caused by a harmful event. It is true, there is a lack of resources, but it is precisely in times of difficulty that insurance coverage becomes indispensable for the sustainability of the production system and family tranquillity. And the insurance broker becomes a key figure: if in the past he was identified as the interlocutor of large companies, today he is also recognized as a privileged partner of small and medium-sized enterprises and professionals”.
EASIER CREDIT FOR WELL-INSURED COMPANIES
An adequate insurance program produces undoubted benefits: the best protected businesses can be facilitated in accessing credit. In fact, good insurance coverage reduces the probability that the company will become insolvent in the face of a harmful event, favors the improvement of the rating (its evaluation as a debtor) and determines the obtaining of less onerous rates.
HOW MUCH INDIRECT DAMAGES MATTER
A study carried out by the European Insurers Committee (CEA) showed that indirect damage is on average 2,5 times higher than direct damage. However, the insurance program of the vast majority of Italian companies does not provide for the transfer of the Indirect Damage risk, i.e. the coverage of the consequences of material damage which occur by producing "indirect" harmful effects linked to the event. This means that companies are not protected from economic losses resulting from a total or partial interruption of production.
According to a recent research, 40% of businesses that remain inactive for more than 3 months as a result of an accident fail within 2 years of resuming business, failing to compensate for the financial instability. Acquiring indirect damage insurance coverage, which guarantees the restoration of the company's economic and financial conditions, can therefore represent a real lifesaver against the crisis.
It is estimated that less than 20% of Italian companies are insured against indirect damages, compared to 80% of German companies. And in the last decade the percentage has not changed.
THE COUNTRY OF DISASTER BUT NOBODY IS INSURED
Italy is the European country most exposed to catastrophic events such as earthquakes, floods and inundations: 82% of Italian municipalities are at risk of hydrogeological instability, with 6 million people living in areas considered high risk and 22 million residing in medium risk areas; 6,1% of the territory is exposed to landslides and landslides, 67% of the Municipalities are in an earthquake zone.
Despite this, unlike other developed countries, Italy has never had a widespread insurance system.
“The importance of insurance coverage for the industrial sector, but also for civilian homes – underlines Paparella – represents a social security and reasonable choice that still eludes Italians. Regulatory interventions on the matter have always had a complicated and tortuous process, without achieving the objective of a legal obligation. But if we became aware of the risk of non-compensation by the State, which is increasingly unable to deal with economic emergencies, the need for protection from events that could mean the partial or total loss of fundamental properties would appear clearly". .
POLLUTION DAMAGE: LOTS OF INTEREST, FEW POLICIES
In the matter of pollution, the medium and small Italian industry is exposed to a complicated regulation which requires correct risk analysis and management. The regulatory discipline establishes the principle "the polluter pays", calling on those responsible for the damage caused to compensate the costs incurred for remediation, safety and restoration of environmental matrices which can take on very large economic values. Despite being very interested in the subject, the Italian production system does not carry out a correct assessment of potential risks and tends to neglect insurance coverage against environmental risk: over 90% of companies either have no coverage or have a RCG policy ( General Civil Liability) with an extension to "accidental" pollution, while only 4.000 companies have a specific policy for pollution damage.
In this scenario, the broker presents itself as a suitable consultant to define the risk areas and identify the business processes that can lead to their elimination or mitigation.
PROFESSIONAL RC LITTLE WIDESPREAD, BUT FROM AUGUST THE OBLIGATION HAS BEEN RELEASED
After a one-year extension, the insurance obligation for many professionals will start from 13 August and the hunt for the policy has just begun. Until now, the new legislation has been interpreted as a further obligation for some professional categories and two aspects have hardly been highlighted: the first concerns the economic protection of the professional and the second the protection of customers who have greater guarantees by turning to insured professionals.
There are around 2 million professionals subject to the obligation, but the potential catchment area is much wider. There are numerous activities without the obligation to register with a professional order but with similar insurance needs: there are 3,5 million professionals employed in more than 200 activities. They range from the so-called traditional activities such as condominium administrators, tax experts, investment consultants, translators and interpreters, educators, to more innovative activities: advertisers, graphic designers, IT consultants, business consultants.
Currently, the insurance offer also for professionals subject to the obligation does not always have the same characteristics and not all professions find solutions. For example, in the Economic and Legal area, most operators offer solutions for lawyers and accountants but not all insure commercial experts and even fewer offer insurance solutions for industrial property consultants (patents and trademarks).
As regards the Technical professions, the choice of roofing for engineers, architects and surveyors is varied; however, it becomes less extensive for industrial and agricultural experts, chemists, agronomists and agro-technicians, customs brokers and actuaries.
It is even more difficult to find insurance coverage for many of the activities not subject to public regulation: for example, there are few companies that provide insurance solutions for interpreters and translators, real estate agents, IT and business consultants.
Alongside the offer of generalist companies there is that of specialized companies, above all of Anglo-Saxon origin, but the offers of the Post Office and some banks are also starting to be present on the market.
As an alternative to the individual policy, the professional can often choose to adhere to an agreement stipulated with the Orders representing the professional categories at national or local level. The insurance coverage offered by the agreements are very different from each other: some professional Orders have chosen to offer essential coverage and therefore aim at the greatest possible number of members with the possibility of individually integrating the insurance coverage, other orders have chosen more complete solutions. It is important that each policyholder verifies the adequacy of the solution with respect to his professional characteristics.
It is not an easy evaluation without the help of an expert, because there are many elements to take into consideration and not all of them are immediately understandable.
