In the face of economic strife, Italy’s insurance market is enduring considerable strain, particularly within its life insurance branch. Fitch Ratings’ 2023 Italian Insurance Dashboard indicates a significant slump in net inflows to these insurers, affecting both traditional and unit-linked life insurance products. Investor preferences seem to have shifted towards government bonds and other higher-yielding bank products. Concurrently, the sector faces elevated surrender rates, the likes of which haven’t been seen in over ten years. Despite these challenging times, there’s a silver lining on the horizon. Expectations are building that the current high-interest rates may start to retreat by 2024, suggesting a potential easing of pressures on the life insurance segment and possibly a return to more typical patterns of investment and policy retention. This forecast aims to bring some solace amid a decidedly tough period for the industry, with hopes pinned on a more stable economic environment ahead.
