Analisi di Enrico Bertagna, Country Manager per l'Italia dei Lloyd's, sulle sfide e le opportunità per i Lloyd’s in Italia

1. 9 October 2012
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ENRICO BERTAGNA
Head of Southern, Eastern Europe & Africa
Country Manager for Italy
MARKET
PRESENTATION
italy

2. © Lloyd’s
Content
2Lloyd’s
3Opportunities
1The Market
• Insurance Market Trends
• Reinsurance Market Trends
• Regulatory Environment
• Whom to target
• What to target
• Conclusions
• Business Profile
• Coverholders & Service Companies

3. © Lloyd’s3
The Market
• Macro Themes
• Insurance Market
• Outlook
1

4. © Lloyd’s
The ITALIAN
Insurance Market
1

5. © Lloyd’s
The Market>Macro Themes
Source: Market Intelligence calculation based on: IHS Global Insight and ISTAT (www.istat.it)
 Fiscal consolidation, fight against tax evasion, liberalisation and labour market reforms have
characterised the last year government programme
 Further work on structural changes is key to reviving growth and competitiveness
1
HEADLINESBUSINESS ENVIRONMENT
 2011 GDP: € 1,600bn which makes Italy the
world’s 8th largest economy – 4th in Europe
 Well diversified, industrial and service-
based economy – (agriculture 1.8%,
industry 24.9%, services: 73.3%)
 A plethora of dynamic SMEs form the
backbone of manufacturing sector
 Exports increased by 11.4% in 2011
 Current challenges: long-standing
sovereign debt (at 120% of GDP) and slow
growth
 A new wave of changes will shape the
country’s future and population well-being
Chart: Italian GDP (Years & Indicator)
in (million US$ & Real % Growth)
Actual GDP
Forecast GDP
GDP Growth
-1.2%
-5.5%
1.8%
0.5%
-1.9%
-1.2%
0.0%
1.9% 1.8%
0
500
1,000
1,500
2,000
2,500
2008 2009 2010 2011 2012 2013 2014 2015 2016
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%

6. © Lloyd’s
The Market >Market Size
Chart: 2000-2011 Market Premiums by Class
in million €
Source: Market Intelligence calculation based on: Ania (www.ania.it) and CEA (www.cea.eu)
 Premiums volume decrease by 12% caused by huge drop in Life sector (- 18%).
Non-life classes remain stable (+1.4%)
 2011 Non-life combined ratio 97.9% compared to 100.2% in 2010
1
Motor
Property
Liability
PA & Health
MAT
Miscellaneous
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

7. © Lloyd’s
THE Market >Top Players
2011 Market Leaders in billion €
Source: Market Intelligence calculation based on Ania (May 2012); www.ania.it
478.6%
 Italian insurers struggle to maintain market shares being too busy in solving internal issues - ratings cut in
July for Generali, Unipol and Allianz
 Further market consolidation to avoid bankruptcy – Fonsai and Unipol
 Brokers say local insurers lack products innovation and personalisation and supporting services
 Groups of agents are looking for alternative arrangements to maintain competitiveness
27%16.2%
31%7.5%
27%6.4%
20%6.0%
0%4.6%
20%4.3%
24%4.1%
30%4.0%
28%3.6%
31%3.4%
27%21.24%
31%19.17%
27%11.92%
20%10.97%
0%5.59%
20%4.47%
24%4.41%
30%3.67%
28%2.23%
31%1.88%
Market Share
Top 10
2011
Other
6,970
4,333
3,988
2,034
1,627
1,603
1,333
810
684
7,724
Total Market
Concentration
1
87% 13%

8. © Lloyd’s
1
* Income includes Reinsurance
2011 Total GWP
€36.3bn
82%
8%
7%
3%
Direct
Bancassurance Brokers
Agents
The Market >Distribution
Chart: 2011 Top Broker Groups
by income* (fees & commissions) in million €
Chart: 2011 Distribution
by channel (in % of total)
Source: Market Intelligence calculation based on: ANIA, “Premi del lavoro diretto italiano 2010 - edizione 2011”, (2011), www.ania.it; distribution breakdown based on CEA, Statistics (2010), www.cea.eu
210
153
91
57
42
40
17
11
9
7
Marsh
Aon
Willis
Ital Brokers
Assiteca
GPA
Cambiaso Risso
GBS
UBI
Marine & Aviation
 Good levels of competition: Independent local brokers use specialisation as a way to compete with
multinational brokers
 Brokers market share increase: Against the grain of the market premium volume, brokers’ share grew by 4%.
48.9% of non-life premiums are now managed by brokers (2010: 47.7%)
 Bancassurance and direct insurance growth: Banks focus more on life and standard policy insurances

9. © Lloyd’s
The Market >Outlook 1
1 Price still the main driver of competition
But hardening of rates has started in Motor and Property
2
3
Gap left by local players
Doors are open for foreign insurers offering high level services and
specialist underwriting skills
Still underinsured but more sophisticated
Opportunities for growth are still substantial but demand is moving
towards more innovative and tailor-made products
Relentless move towards alternative distribution
The agents channel loses shares of Personal Line business to banks
and aggregators
44

10. © Lloyd’s10
Lloyd’s
• Background
• Business Profile
• Coverholders & Service Companies
• Events
2

11. © Lloyd’s
Lloyd’s >Background – Italy
2011
Lloyd’s Total
Gross Signed
Premiums
€ 443m
-2%
LLOYD’S GROSS SIGNED PREMIUMS (GSP)*
SOURCE: Market Intelligence based on *Gross Signed premiums; Xchanging (2012);
unaudited figures based on country of origin and processing by calendar year;
see Appendix for details
1
2012 half-year premium volume up
2
2
Lloyd’s is considered a first choice
insurer by most of local brokers3
Active participation in market
discussions confirms opinion leader
position for Lloyd’s
SUMMARY
1 Pioneering initiative led to
fruitful alliance with an
agents group
2 Substantial positive press
visibility from strengthened
relationships with top media
3 Increase in public tender
bids thanks to LIO proactive
promotional role (web tools)
SUCCESS STORIES
1 Support stakeholder exploiting Lloyd’s
strong position in Italy (e.g. PI opportunity)
2013 FOCUS
2 Build new strategic partnerships
4
Maintain brand awareness and penetration
Deliver enhanced operating efficiency
3
2011: 8% drop in Medmal business
offset by increase in other classes
4
0
100
200
300
400
500
2007 2008 2009 2010 2011
Direct Reinsurance

12. © Lloyd’s
Lloyd’s >Business Profile
2007 – 2011 Premiums by type (in million €) 2011 GROSS SIGNED PREMIUMS*
Total € 443m
Reinsurance € 265.1m
Direct € 177.9m
KEY TAKEAWAYS
2
1 Liability has been the growing class in recent years. Further development expected
following new legislation on compulsory professional liability insurance.
2
3 Potential to differentiate in other specialist classes: CAT, Renewable Energy, SME
2011 Premiums by Class (in million €)
SOURCE: Market Intelligence based on *Gross Signed premiums; Xchanging (2012); unaudited figures based on country of origin and processing by calendar year; see Appendix for details
Despite financial crisis, production of super-yachts is increasing and Marine
insurance sector continues to offer growth opportunities
0 50 100 150 200
Accident & Health
Aviation
Casualty
Casualty Treaty
Energy
Marine
Overseas Motor
Property (D&F)
Property Treaty
UK Motor
0
100
200
300
400
500
2007 2008 2009 2010 2011
Direct Reinsurance
*
COUNTRY OF ORIGIN PREMIUMS
 Policyholders are based or
headquartered in this territory;
 Premiums may be written outside
this territory;
X Not necessarily where risks are located
X May differ to what is reported to
local regulator (dependent on local requirements).

13. © Lloyd’s
Lloyd’s >Coverholders & Service Companies
COVERHOLDER & SERVICE COMPANIES
1 Wholesale model is successful and can be supported through its promotion
amongst OMCs and other local intermediaries.
2
2
Source: Market Intelligence calculation based on Country Manager & Lloyd’s Delegated Authorities (April 2012)
Numbers of Coverholders by region
3
CHs network could support Lloyd’s business development through cross-border
activity in CEE.
Need to anticipate solution to possible adverse implications of IMD2.
Number of active binders by region
0 52
Coverholders, Service Companies &
Open Market Correspondents
 98 Coverholders
 2 Service Companies
 361 Open Market Correspondents
52
11
9
6 22 Other

14. © Lloyd’s
Lloyd’s > Events & Priorities
Source: Lloyd’s - 2013 Country Plan for Italy
2
The Lloyd’s Country Development Plan
contains key Market Development
Activities and a clear Vision
VISION
To maintain Lloyd’s leadership position in Italy as
a broker friendly market and a key provider
in the Liability area.
MARKET DEVELOPMENT PRIORITIES
1. Implement recommendations from the 2012
strategic review of local distribution network
2. Maximise positive effects of Lloyd’s strong
position in Italy
3. Identify potential partners for strategic
alliances
4. Maintain the highest level of Lloyd’s brand
penetration and awareness in the country
2013 COUNTRY DEVELOPMENT PLAN 2012 EVENTS
1
LLOYD’S – ILLCA EVENT
Over 500 participants - Meet the Market +
Networking Event + 2 Class of Business event in one
day
2
3
© Lloyd’s
1
KEY
FACTS 2
KEY
STATISTICS 3
BUSINESS
ENVIRONMENT 4
INSURANCE
ENVIRONMENT 5
LLOYD’S
BUSINESS
 Positioning Lloyd’s as an unquestionable leader on non-life speciality insurance and reinsurance market in Poland. Lloyd’s is well understood by the top local intermediaries
contacting Market and bringing business there on a daily basis. The coverholder’s network is well established across the country and the local coverholders deliver the
substantial part of Lloyd’s country production.
 Build a network of at least 15 coverholders at the end of 2012.
 Targeting 20 top insurers in the country and supporting them in developing business with Lloyd’s.
 Promoting use of Lloyd’s Polska office in Warsaw.
 Improving the visibility and understanding of Lloyd’s among the local stakeholders.
 Promoting Lloyd’s in the country.
INDUSTRY EVENTS
 Annual Brokers Congress, May 2012.
Events & Market Intelligence
LLOYD’S EVENTS
 Polish Risk Managers Visit to London, 12 March 2012.
 Reinsurance Rendezvous, Warsaw, 5 June 2012.
 Regional event in Hungary, Budapest, 26 June 2012.
 Meet the Market Event, Warsaw, 11 September 2012.
MARKET INTELLIGENCE
> www.lloyds.com/marketintelligence> www.lloyds.com/events
Country Profile
Market Presentation
Country Roundup
Lloyd’s Vision 2012
Lloyd’s key Initiatives 2012
SUMMER COCKTAIL
Kiln 50th Anniversary - Record attendance: + 30%
Emerging risks event IN NOVEMBER
Supply Chain Risks Report – UK Embassy in Rome
2013 EVENTS
LLOYD’S – ILLCA EVENT
New format
1
MANAGING AGENT RECEPTION AT LIO
Marketing opportunity for MA
THE BUSINESS OF ART
In collaboration with specialist loss adjusting firm
2
3
4
CLASS OF BUSINESS EVENTs
• Liability and Cyber Risks
• Renewable Energy and CAT
5 CH FACT FINDING MISSION TO CEE
Encouraging cross border business

15. © Lloyd’s
Lloyd’s >Outlook 2
1 LLOYD’S IS VERY WELL POSITIONED IN THE COUNTRY
It is considered as a player of choice for specialist classes by local brokers
and brand awareness and penetration is very high in the country
2 LOCAL NETWORK AND PARTNERSHIPS
Well-established CHs and new connections with agents, banks and trade
associations are there to support MAs who wish to enter the market
3 ITALIAN OFFICE IMPROVING EFFICIENCY
Stakeholders benefit from an efficient and competent platform which makes
business transactions easier and safer

16. © Lloyd’s16
Opportunities
• Whom to target
• What to target
• Conclusions
3

17. © Lloyd’s
3Opportunities
1 Who to target
2 What to target
Local Carriers Pursue opportunities for new strategic alliances to offer
specialist insurance solutions
Marine Market share growth based on Lloyd’s legacy
Local Coverholders To implement recommendations from 2012 strategic review:
stimulating more business, supporting cross border activity
and minimise potential threats to CH model
Lloyd’s Brokers Collaboration on new strategic alliances and for increased
support of the wholesale broker model
Natural Disasters Continued involvement in the craetion of a CAT pool
Casualty Exploiting new legislation introducing compulsory professional
liability insurance and gap left by local insurers
Renewable energies Penetration of sector through alliances with local trade
association
3

18. © Lloyd’s
Conclusions
1 Economic situation could lead to better risk management
> Government needs to introduce urgent economy growth measures and is working on building a
safer environment introducing new legislation
State no longer able to sustain CAT and other social costs – to be transferred to insurance
industry
Few large local insurers unable to meet clients’ demand
The Lloyd’s Office in Italy is there to help Managing Agents and Brokers
access & develop profitable business in the country
2 Well established distribution network – a key asset
> The largest Coverholder network in Europe
> Wholesalers and new channels (agents and banks) to embrace new opportunities
3 Strategic alliance with local brokers and risk managers
> Continue to promote Lloyd’s as a broker friendly market
> Risk managers – a key stakeholder group
333

19. © Lloyd’s
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Disclaimer
This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the
information Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or
liability for any loss to any person acting or refraining from action as a result of, but not limited to, any statement, fact, figure,
expression of opinion or belief obtained in this document.
Lloyd’s Data Limitations
Please note the information contained in this document is based upon data collected from Xchanging and may be incomplete
for some classes of business; for instance a substantial figure, which is missing from the REG 258 data set is comprised of UK
Motor, which is not processed by Xchanging.
Gross Premiums: Original and additional inward premiums, plus any amount in respect of administration fees or policy
expenses remitted with a premium but before the deduction of outward reinsurance premiums.
Lloyd’s figures are based on gross written premiums based on figures processed by Xchanging by processing year and country
of origin.
Country of Origin: denotes the country from where demand for the insurance / reinsurance emanates; i.e. the coverholder or
policyholder, irrespective of the country to which the risk is classified for regulatory reporting purposes.
Processing Year: relates to the calendar year in which the premium, additional or return premium is processed by Xchanging,
irrespective of the actual underwriting year of account of the risks (which is determined by the inception date of each risk).
Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by Country Of Origin, but
French for regulatory reporting purposes. Similarly a risk incepting on 1st December 2007 would be classified at 2007
underwriting year of account but may not be processed by Xchanging until 2008 and so be allocated to the 2008 processing
year
Exchange Rate Policy
Annual average exchange rates are used in all conversions.
Appendix > Data Limitations & Disclaimer

23. © Lloyd’s23