February 2021

Italians are among the least covered in the EU

COVID-19 has brought back into focus the need to protect family incomes from unforeseeable and grievous events. As the second edition of a study conducted by elipsLife and Prometeia shows, international comparison suggests ways to increase protection for Italians.

The newly launched Life Insurance Research shows a significant protection gap in Italy, and to a lesser extent in Spain, compared to Germany, the Netherlands, the UK, France and Switzerland. Only 3% of Italian workers are covered for biometric risks.

As public social security instruments become less and less effective across Europe in ensuring adequate coverage to families in cases of permanent disability and premature death, corporate welfare is stepping in to provide support when needed.

In some European countries, like Italy, it is more than ever necessary to develop a culture of protecting family incomes and start reflecting, for example, on the possibility of shifting a small part of contributions paid into pension funds from the accumulation phase to insurance products.

The publication reveals that, to date, the first pillar is not sufficient to protect against the financial impact of severe events such as death and permanent disability. The picture does not look likely to improve as income is lower than expenditure and it will be increasingly difficult to finance the welfare state in Italy.

The publication reveals that the first pillar is not sufficient to protect against a financial impact: This is a common situation across European countries and it is fully understandable;  the state protection is devoted to giving a minimum protection against these kinds of events. What is not common among the countries  analyzed, is the role of the second pillar/pension funds. Here there is a huge difference between Italy and the rest of Europe countries reviewed. With the exception of Italy all the second pillar/pension funds provide a significant protection against the economic consequences of a death or disability affecting the balance sheet of a family. 

Insurance for severe events should be a right for all and should be provided as efficiently as possible. The individual cannot be left alone in the choice and purchase. Individual policies are less efficient, given the higher product and distribution costs. Group policies, on the other hand, take advantage of a larger pool of policyholders, with lower costs and are therefore more accessible.

For employees, Pillar II is a very important protection and welfare tool. Trade unions play a key role in the definition and implementation of national collective agreements and company supplementary agreements.

The full findings of the Life Insurance - Seconda Edizione 2020 study (in Italian only) are available on the elipsLife website.