Italians increasingly able to save, despite the crisis. Or rather, demonstrating a recovery which, if still weakly concerns consumption, converges instead in one of the activities historically preferred by Italians: savings. This was revealed by a research presented in Turin by Intesa Sanpaolo and the Einaudi Center, the Survey on Savings and on the financial choices of Italians updated to 2018, according to which the number of families able to save rises over 47 percent of the sample : in 2017 they were 43,4 percent. And that's not all: the percentage of interviewees who declare that they have sufficient or more than sufficient income rises from 60,8 to 63,6 percent.
It is Intesa Sanpaolo that is interested in this trend, which by now makes bancassurance the main objective of the next plan (and precisely the headquarters of the Turin skyscraper it will be the new pole of the insurance business), with the aim of replicating what has been done in Life - branch in which Intesa is the first operator in Italy for income - also in Non-Life and in so-called wealth and protection management: in fact, the survey also reveals that the main reason for saving by Italians is precisely that of coping with the unexpected (43%), then there are children, old age, and the house.
Among the insurable risks, the most underestimated is that of health, for which the family is still valid as a privileged instrument of solidarity and guarantee. That's exactly why they emerge large spaces for a higher demand for insurance coverage, to deal with the risks related to health, unexpected events and old age, also in relation to the evolution of our socio-cultural model, where the public sector takes care of this aspect less and less.
“The crisis – he commented Gregorio De Felice, chief economist of Intesa Sanpaolo – has tried to undermine, but fortunately with limited success, one of the traditional strengths of our country: the ability of families to accumulate real and financial assets. Italians have historically shown an aptitude for saving a lot and borrowing little, even if over time the propensity to save has progressively decreased, in line with the main advanced economies”.
Here is the summary of the research:
- The recovery consolidates: the percentage of those declaring that they have sufficient or more than sufficient income for their standard of living rises from 61 in 2017 to around 64 per cent of the sample. The survey carried out in 2017 revealed a slow and incomplete recovery of family budgets. The 2018 survey is more reassuring: signs of recovery are more widespread among the categories in the sample and affect all subgroups. As many as 92 per cent of the interviewees declare that they autonomously provide for the family budget, without resorting to help from third parties; the share of heads of families, who are not financially independent, who say that their condition is caused by the crisis, has halved from 40 to 20 percent. The balance between assessments of sufficiency and insufficiency of income reaches +55,6 per cent, an increase of about 5 points compared to 2017 (+51) and is almost double the minimum reached at the worst moment of the crisis (+30) .
- Savers are growing. The area of non-savings, i.e. households that have not set aside anything in the twelve months preceding the Survey, contracted from an all-time high of 61,3 per cent of respondents in 2012 to 52,7 per cent in 2018. Conversely, the percentage of saving households rises to over 47 per cent, from 43,4 per cent in 2017. The propensity to save (calculated by asking respondents what percentage of income they have saved) rises slightly to 12 per cent of income, the highest value since 2001.
- Retirement age: expectations on the standard of living improve. After having feared for a few years that they would not be able to sustain their standard of living in old age, the interviewees once again believe that they can do it. The balance between optimists and pessimists on the possibility of sustaining living standards in old age rises to +31,2 per cent, a marked increase both on the previous year (+19,1 per cent) and on the minimum reached in 2016 (+ 6,7 per cent): the 2018 value is the best in the historical series since 2007. However, only 21,7 per cent of people under 35 declare that they have subscribed to the 2nd or 3rd pension pillar and will therefore have a form of integration of the compulsory pension. Italians tend to have a certain passivity towards the risks associated with aging and a preference for "do-it-yourself": in fact, one sets aside and invests the necessary amount to self-insure the risks associated with old age.
- Reasons for savings: the unexpected weighs, the future of the children and old age follow. The main reason for saving is the generically precautionary one, which affects around 43 per cent of "intentional" savers: it appears to be particularly widespread among women, the youngest and the oldest. Followed by the future of children (21,1 per cent), old age (19,7 per cent) and the house (14 per cent). Before the crisis, the house occupied the second position (26 percent), after uncertainty (42 percent) and before old age (21 percent).
- For 9 out of 10 savers, risk aversion is absolute and investment safety always comes first. When the saver turns into an investor, he puts first the goal of not losing even a cent of what he has saved. Security remains, by far, the top goal, and is cited as the number one goal by about three out of five respondents; followed by short-term returns (3 per cent), liquidity (13,6 per cent) and, lastly, long-term returns (11,7 per cent).
- Asset management surpasses bonds. The honeymoon of savers with bonds is over: 19 per cent of those interviewed hold them in their portfolios (29 per cent in 2007) and, for holders, they now represent only 24 per cent of assets (36 per cent in 2015). The investors interviewed exited from bonds in two directions: liquidity (favored by the inflation rate below 1 per cent) and managed savings. In the 2018 edition, 21,4 per cent of the sample declared the possession of at least one form of asset management (in the last 5 years): subscribers of mutual funds were 10,9 per cent (7,2 per cent percent in 2015), those of ETFs 7,3 percent (2,3 percent in 2015), those of unit-linked policies 2,8 percent (2 percent in 2015).
Insurance: investment and protection
- risks: almost generalized underestimation. The interviewees appear to be able to correctly estimate almost only the risks from home thefts and robberies; on the other hand, all the other risks, from serious motor vehicle accidents to accidents and disability in the third and fourth age, are underestimated. Also evident from the survey results is a limited ability to formulate correct probabilities associated with a simple experiment based on the roll of a dice; more than a third of the sample also tends to systematically overestimate their luck in lotteries.
- Health is good, but little assured. 15,5 percent of the sample turned to private health services in the twelve months preceding the interview, but only 2,8 percent did so thanks to insurance or mutual coverage, while as many as 12,7. 8,6 percent paid out of pocket. Furthermore, 46 per cent gave up treatment in the months preceding the Survey; 9,7 per cent of the latter cited an economic reason for giving up. According to the Survey, the diffusion of health policies concerns 1 percent of the interviewees. Bearing in mind the intention to subscribe to a policy in the future, a potential demand equal to XNUMX new policy for every two subscribed appears to be latent. Subscribing to these policies is directly related to the level of income.
- Long Term Care (LTC): an underdeveloped insurance market, while out-of-pocket spending by households to deal with these risks is close to 15 billion a year. With an average life expectancy at birth of 82,8 years, Italy is the fourth OECD country for longevity; however, life expectancy in good health is 58,5 years. These dynamics have determined the lengthening of the number of years in which both the demand for intensive care and the probability of contracting chronic and/or disabling pathologies grow. By 2050, 2,2 million people may need to bear the costs of non-self-sufficiency, which already currently involve an annual expenditure of 9 billion for the hiring of carers and 5 billion for the payment of hospital fees in hospitalization facilities. Considering our sample, 37 per cent of those interviewed over 65 declared to have a disability, at least of a slight level; however, coverage for disability in old age (LTC) concerns less than 10 per cent of the sample. 42 percent of the coverage declared depends on group insurance, 58 percent on individual insurance. 8,5 percent would be inclined to invest in an LTC policy, but only a few state that they have concretely planned the expense (2,8 percent). The overall propensity to take out LTC policies, like possession, increases with income: those who earn less than 1.600 euros, in 68 per cent of cases simply do not have the availability of money to insure, since it drops to 39 per cent above the 2.500 euros of monthly net income.
- Life insurance: subscriptions still not oriented towards protecting against the risk of death and integrating pension income. The underwriting of a policy that pays a lump sum in the event of death was declared by 9 per cent of those interviewed: this percentage depends on income, since only 5 per cent of policyholders correspond to the lower income classes, against 15 per cent of the upper classes. Life policies that have a pension-social security content are instead more widespread. 17 percent of the total sample owns one; 28 percent of entrepreneurs; 24 percent of executives; 17 percent of office workers; 19 percent of workers; 19 per cent of university graduates and 18 per cent of people with a lower secondary school qualification. The propensity to take out a third pillar policy by those who still don't have one is 17 per cent. Even in this case, however, only 3 per cent (out of the aforementioned 17 per cent) declare that they have already planned it, while the majority (the remaining 14 per cent) is made up of declared intentions which, however, will not necessarily pass on to investing concrete.
- Business insurance is set to grow. The risks of "doing business" are increasing: from IT risks, to those of compliance, to those of civil liability, to those linked to the internationalization of companies. One interviewee out of five (331 out of 1.544) has a business or professional activity, but only 20 per cent have insurance on the capital goods of their work and only 14 per cent have an RC policy. The least insured of all is IT risk (3 percent). Among the policies that entrepreneurs plan to take out in the future, the most attractive (29 percent) is the one that replaces income in the event of forced inactivity.
- Underinsured by income, but also by financial literacy gap. The Survey confirms the hypothesis that Italians are under-insured. For example, only 20 percent of homeowners have home insurance; only 7,5 percent have civil liability insurance, but as many as 56 percent say they are "worried" if they have to pay damages of 1000 euros; only 14 percent have signed up for an open or closed pension fund, but 52 percent say they are concerned about maintaining their standard of living when they retire. Ultimately, even with 1,4 insurance policies per capita (mandatory ones on motor vehicles are excluded), Italians have more future risks in their portfolios than coverage. The causes of underinsurance are potentially diverse and numerous: some (approximately 5-10 per cent) are self-insured, i.e. have assets that can absorb the economic damages of the concrete realization of the risks to which they are exposed. For the rest of the sample the situation is different. There are two major causes: 1) the underestimation and underestimation of risks, also due to a reduced average competence and experience in economics and finance (the theme of the 2017 survey on the Italian financial literacy gap returns); 2) the spending power of part of the interviewees: under the threshold of 2.500 euros in income, very little insurance is allocated, apart from the compulsory ones.
- Serenity and fear: the calculation of a "fragility index" reveals the differences in exposure to risks of the subgroups of the sample. The highest and most relevant risk (cited by 73 percent of the interviewees) consists in having to deal with a chronic and disabling disease (in the family). In second place is a non-disabling chronic disease (64 percent); to the third the need to face dental care (60 percent). An acute illness to deal with worries 57 percent of the sample, a value that drops to 43 percent of the youngest and to 42 percent if they earn an income of more than 2.500 euros. Suddenly paying back 1.000 euros worries 56 percent of Italians, but only 34 percent of those who collect more than 2.500 euros a month. This is followed, in decreasing order of risk value, by the need to deal with a long period of inactivity and declining income; the care of oneself or of one's life partner in the third and fourth age; the possibility of maintaining the standard of living in retirement; care for the elderly (parents, uncles, grandparents); worrying about an injury in your spare time. A "fragility index" (calculated as the average fear frequency for all the risks investigated and for each category) was constructed to underline the need for coverage. The average index of the sample is 61. The minimum value (0) is that of executives, while at the top of the ranking of fear (and therefore of the need for security) are people with minimal education (70), with the lowest income (73), housewives (75), the unemployed (90), people without economic independence (87), workers (100, maximum of the fragility index), couples with minor children (77) , who lives in Southern Italy (70). On the contrary, at the bottom of the fragility scale are executives (0, absolute minimum), graduates (34), those who earn more than 2.500 euros (34), those who live in the North-East (44), those with between 18 years and 24 years (37, because he probably underestimates the more distant risks) and finally singles (41).
