Unipol can shed motor-dependency, diversify into 4.5% top line growth

Italian insurance group  Unipol can fight off stiff, price-suppressing competition in its core auto market to secure 4.5% compound annual growth through 2024 in non-life premiums to €8.9billion as it invests into a digital omnichannel model that can diversify its insurance covers.

“Most challenging is distribution, production,” Matteo Laterza CEO of the group’s operating unit  UnipolSai told analysts and brokers in presentation of a new three-year strategy. “The competitive arena is more and more challenging.”

In auto, low-cost approaches to telematics, data-driven pricing algorithms, deals with auto producers and dealers and a refined claims approach should push automotive combined ratios to a target of 93.9%.

Premium in the segment should grow an average CAGR 3.1% over the period to €4.2 billion by 2024, following a market where inflation pressures can do nothing but deliver at least some upward pressure. “We see a progressive increase in prices because this is what the market needs,” co-GM and head of insurance Enrico San Pietro said.

“We don't have very specific expectations of what the market will be doing by itself,” San Pietro said. “We have faith in what we will be doing.”

Non-motor lines can generate a faster 4.7% compound annual growth rate to €3.7 billion while combined ratios should head to 85.9%. Non-motor offerings are led by health, where premiums may grow at a 10% pace and  Unipol will test its abilities to add service components to insurance offerings. By 2024, the health offering should have its own combined ratio at 90.4% and account for €1.0 billion in premium.

To get there, the sales machine runs through banks, brokers and tech platforms.  Bancassurance will have to increase its contribution to non-life premium by €500 million. Investments into tech will accelerate.

“All of this requires large investments,” Laterza told the hybrid event, citing a €500 million target for steps towards “an omni channel platform” of “integrated products with sophisticated top-level insurance and consulting services.”

By the bottom line, consolidated group profits should stack up to some €2.3 billion over the strategy horizon, up from the €2 billion earned under the 2019-21 period.

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