(AGENPARL) – ven 16 dicembre 2022 I am happy to welcome you to this workshop. Its purpose, as the title states, is to discuss
liability insurance, with a view to contributing to the current debate on possible reforms
of rules and practices in Italy. In my introductory remarks, I shall focus on the case of
automobile insurance, by far the most important in quantitative terms and the main
focus of public debate; however, the lessons we shall learn today are likely to be relevant
and transparent way have a non-negligible impact on welfare. In 2021, 43m vehicles, of
Historically, car insurance has been more expensive in Italy than in comparable European
deployment of a common database of claims (managed by Ivass) that makes it possible
New legal rules on compensation have reduced uncertainty about the value of awards for
physical damage. The gradual spread of ‘black boxes’ is likely to have encouraged more
careful driving by those who have adopted it. Quite possibly, improved road design and
With all that, gaps remain. Both the average premium and the average claim cost are
still higher in Italy than in other major European countries. Within Italy, geographical
the cheapest and the most expensive province has been reduced by almost one half since
There is therefore still some way to go, especially if one considers the pressure that
is now
expect insurance companies to implement it in full, and customers to make good use of it.
hard to come by, it is estimated that about 6 per cent of drivers are not actually protected
by legally mandatory insurance. Since damages caused by uninsured and insolvent
drivers can be covered by a solidarity fund payed for by the insurers, the inherent cost is
Mandatory car insurance is necessary to avoid adverse selection and harmful externalities,
drivers and reward prudent driving. It is here that experience rating enters the picture.
attestato di
”) contains information on the history of individual claims. It follows the policyholder
to adjust the price of insurance and to reduce moral hazard: estimates show that, on
precise, in that most people are concentrated in a single risk class. In the second
quarter of 2022, 87 per cent of policyholders belonged to the best class, and 89 per
mitigation tools include deductibles, mileage-based charges, mandatory alcohol ignition
locks, and much else. Still, many of us believe that experience data could be exploited in
It is not necessarily a straightforward task, and it does need rigorous economic reasoning.
calculation of premia. A further possibility, discussed by Yi Xin, is monitoring not only
actual accidents, but also near-misses; the implications of doing so are not obvious ex
ante (does a near-miss suggest inherent carelessness, or may it result in enhanced risk
An even subtler issue has to do with the information on driving habits recorded by
of penalties enforced by potential and current insurers, if coupled with price walking
connected. The more risk-sensitive the premium is, the fairer the pricing becomes in
actuarial terms; but at the same time, the incentive for non-compliance also becomes
stronger because of adverse selection. Even as things stand now in this country, elevated
geography-based premia in some provinces appear to be associated with a higher
order to produce a superior outcome in terms of welfare, and in the interest of honest
and prudent drivers, there may be limits to what enforcement can realistically achieve
with given resources. If strict risk-sensitivity produces in some cases premium levels so
be illusory and, some might argue, even unfair in a non-technical sense. One more trade-
This morning’s academic discussion will provide useful insights for the second part of
our programme, where industry representatives and authorities will debate on possible
directions for reform. On our side, and given our statutory responsibilities, we intend to
Turning to our academic program, it is now my pleasure to introduce Professor Fang
Professor Fang is the Joseph M. Cohen Term Professor at the University of Pennsylvania
span a wide range of subjects, from public to labour economics, from the economics of
information to the economics of insurance. For his work in insurance economics he was
panel of speakers; and thank all participants, including those that are following us online.