In a macroeconomic and financial context characterised by low interest rates, high uncertainty on financial markets and an ever-changing regulatory scenario, the group will focus on the initiatives of the Technical Excellence programme and cost savings.
SOME DATA ON THE OUTLOOK FOR 2017
- Rates: In the context of economic weakness, the ECB will retain an accommodating stance, although at the end of the year speculation will grow about the end of quantitative easing. In 2017, US rates will rise, pushed by the gradual release of the Fed’s quantitative easing, and a rise in long-term Eurozone growth is expected, especially at the end of the year.
- Equity markets: A modest recovery is forecast in the Eurozone’s stock market and a less outstanding performance than the previous year in the United States.
- Insurance market, non-life insurance segment: In the main Eurozone countries (Italy, Germany, France, Spain) we expect a good performance in premiums in 2017, which should also see a recovery in Italy. On the distribution front, competitive pressure will be accelerated. As a result of digital transformation, there will be more space for non-traditional or non-exclusive distribution networks (e.g. aggregators), with potential impacts on portfolio volatility and, from an industrial point of view, a drop in volumes and profits.
- Insurance market, Life segment: Influenced by low interest rates, the segment will show signs of suffering even in 2017, except in Italy, where life premiums are expected to have a better trend than in 2016.
- Reinsurance: The catastrophic events that occurred in 2016 around the world did not have a significant impact on the reinsurance industry. This has led to a continued reduction in reinsurance costs.
FORESEEABLE EVOLUTION OF MANAGEMENT
- Life segment: we will continue to face the various dynamic market-based constraints, such as the Solvency 2 directive, the IMD2 rules that regulate transparency more restrictively in the distribution of insurance products and, in general, the financial markets characterised by persistent low interest rates. We will strengthen the value of our portfolio with an approach based on simplification and innovation of the range of product solutions.
- Non-Life segment: In order to cope with strong competitive pressure, we are intensifying the implementation of a series of initiatives aimed at compensating for the effects on profitability (especially in the car industry) with anticyclical measures and a disciplined approach to pricing and risk selection, improving the profiling of the customer, insisting on long-term relationships, and developing products with a modular system to take advantage of cross-selling opportunities on non-auto products. Management of the Non-Life segment will therefore remain key to the implementation of the Group’s strategy: we aim to become leaders in the retail segment in Europe.
- Investments: Our investment policy will continue to be based on an asset allocation to consolidate current profitability and ensure consistency with the liabilities towards policyholders.
Despite the difficult context and the high volatility of the financial markets, in 2017 we expect to increase the remuneration of shareholders in line with our strategic plan.