Sumario: La distribuzione dei servizi assicurativi tramite la rete di sportelli bancari -- La dis... more Sumario: La distribuzione dei servizi assicurativi tramite la rete di sportelli bancari -- La distribuzione dei servizi assicurativi tramite le aziende di credito in: Francia, Germania, Gran Bretagna
In the last years European banks have entered the high margin P&C insurance business by means of ... more In the last years European banks have entered the high margin P&C insurance business by means of selling agreements with insurers and through stock holdings in insurance firms that distribute their products via their parent banks' branch network. This article sheds light on these insurance companies' performance, by means a sample of Italian P&C insurers operating in the country during the 2005-2015 timeframe. After completing a descriptive analysis to single out bank-affiliated insurers' specific features, we perform a multivariate regression in order to ascertain if bank affiliation affects operating profitability and if profitability determinants' influence on performance is different depending on affiliation. While when we do not check for slope coefficients' differences we find that bank affiliation negatively affects performance, when we take into account the possibility that bank affiliation might also influence profitability determinants' impact on performance our findings show that affiliation alters both operating costs' and underwriting results' influence on operating results. Moreover, passive reinsurance usage by bank-affiliated insurers has a negative impact on performance while not having any for other insurers, suggesting that bank-affiliated firms employ passive reinsurance to make up for poor risk selection skills while other insurers' transfer risk activity is linked to different purposes. In addition, our results show that bank-affiliated insurers have an advantage over other firms in the business lines they favour, possibly due to the privileged access to their parent banks' retail customers. The implication of our analysis is twofold: on one hand, banks seems to exploit controlled insurers to generate fees while performing a low capital absorption activity. On the other hand, bank-affiliated insurers' effectiveness at targeting retail customers threatens other insurers' position.
Sumario: La distribuzione dei servizi assicurativi tramite la rete di sportelli bancari -- La dis... more Sumario: La distribuzione dei servizi assicurativi tramite la rete di sportelli bancari -- La distribuzione dei servizi assicurativi tramite le aziende di credito in: Francia, Germania, Gran Bretagna
In the last years European banks have entered the high margin P&C insurance business by means of ... more In the last years European banks have entered the high margin P&C insurance business by means of selling agreements with insurers and through stock holdings in insurance firms that distribute their products via their parent banks' branch network. This article sheds light on these insurance companies' performance, by means a sample of Italian P&C insurers operating in the country during the 2005-2015 timeframe. After completing a descriptive analysis to single out bank-affiliated insurers' specific features, we perform a multivariate regression in order to ascertain if bank affiliation affects operating profitability and if profitability determinants' influence on performance is different depending on affiliation. While when we do not check for slope coefficients' differences we find that bank affiliation negatively affects performance, when we take into account the possibility that bank affiliation might also influence profitability determinants' impact on performance our findings show that affiliation alters both operating costs' and underwriting results' influence on operating results. Moreover, passive reinsurance usage by bank-affiliated insurers has a negative impact on performance while not having any for other insurers, suggesting that bank-affiliated firms employ passive reinsurance to make up for poor risk selection skills while other insurers' transfer risk activity is linked to different purposes. In addition, our results show that bank-affiliated insurers have an advantage over other firms in the business lines they favour, possibly due to the privileged access to their parent banks' retail customers. The implication of our analysis is twofold: on one hand, banks seems to exploit controlled insurers to generate fees while performing a low capital absorption activity. On the other hand, bank-affiliated insurers' effectiveness at targeting retail customers threatens other insurers' position.
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