The backbone of the Italian economy comprises more than 800’000 small and medium enterprises, in the segment from 10 to 50 employees, and their approximately 7 million employees. This workforce is one of the most important assets to the companies who employ them, while at the same time, employers have a social responsibility to keep their people safe and protect them from the financial consequences of major events.
The COVID-19 pandemic has highlighted that such a crisis can affect the active workforce in a very ‘democratic’ way, i.e. workers can get ill, disabled or even die, irrespective of age, gender or hierarchy. Even more so, many Italians have no insurance policy to cover disability or loss of life what so ever.
Especially since biometric risk insurance is concentrated on directors and managers in Italy, regular employees are often neglected and don’t have the possibility to take out a group life policy through their employer. As a result, collective protection against severe or peak events is very limited.
A sad paradox is that the younger the employee, the less likely their families are protected by the first and second pillar (pension funds) of the social security system. The reason being, that they only have a few years to contribute and accumulate funds.
Another aspect relates to pension funds in Italy which, compared to its neighboring European countries, are under no obligation to invest even a small part of their contributions in disability and premature death covers. Thus, this untapped source of protection goes unused. In my view, it is a missed opportunity for the Italian market.
From the life insurance research that elipsLife conducted in collaboration with Prometeia in 2019 and 2020, we concluded that there is great potential for companies to provide group policies to their employees to protect them against peak events. Workers can be offered an individual policy at the cost of a collective one with simplified underwriting rules which are typical for group policies. Allowing employees to join a collective cover taken out by their employer on a voluntary basis, and at an affordable cost, can make or break the deal in terms of protecting a breadwinner's family income for the future.