INSURANCE SERVICES
POSTE VITA INSURANCE GROUP
In continuation of strategic objectives pursued in previous years, in 2014 the Poste Vita Insurance Group primarily focused its efforts on:
- consolidating and strengthening the Poste Vita Parent Company's position in the life insurance and pensions market, with a particular focus on the supplementary pension segment and new emerging needs (primarily welfare and longevity);
- growing the non-life insurance business, with a view to positioning the subsidiary, Poste Assicura, as a leading player in this market.
Thanks partly to a constant focus on products, stepping up support to the distribution network and growing
customer loyalty, the company’s efforts concentrated almost exclusively on the offer of Branch I investment and
savings products (traditional separately managed accounts) with inflows of around €14.7 billion (€13 billion in 2013),
while a marginal contribution was made by the sale of Branch III products (€17 million in 2014, compared with €79
million in 2013).
Total premium revenue amounts to €15.4 billion (€13.2 billion of insurance premiums in 2013).
Poste Vita has also consolidated its undisputed leadership in the pensions market, with the number of subscriptions to
Postaprevidenza Valore exceeding 711,000.
Sales of pure risk policies (term life insurance) also performed well. These are sold in stand-alone versions (therefore,
not bundled with investment products), with over 26,000 new policies sold during the year, whilst around 123,000
were new policies, again of a pure risk nature, were sold bundled together with financial obligations deriving from
mortgages and loans sold through Poste Italiane’s network.
With regard to treasury management, the company continued with its investment policy focused on keeping
investment funds separate in order to match investments to insurance obligations and, at the same time, running a
portfolio that can provide stable returns in line with the market. Investment policy was marked by the utmost
prudence, with a portfolio primarily invested in Italian government securities and highly-rated corporate bonds. In the
second half of 2014, the company also launched a process of diversifying its investments, whilst maintaining a
moderate risk appetite, via investments in a multi-asset, harmonised open-ended fund of the UCITS (Undertakings for
Collective Investment in Transferable Securities) type. Returns on investment from separately managed accounts (4%
for PostaValorePiù and 5% for PostaPrevidenza), as well as from the company's free capital, both registered good
performances, partly due to realised gains of approximately €55 million.
As a result of the above-mentioned operating and financial performance, technical provisions for the direct Italian
portfolio amount to €77.7 billion (€65.2 billion at the end of 2013), including approximately €68.4 billion in Branch I
and V provisions (€55.5 billion in 2013). Provisions for products where the investment risk is borne by policyholders
amount to €8.5 billion (€9.2 billion at 31 December 2013). Deferred Policyholder Liability (DPL) provisions rose from
€2.7 billion at the beginning of the year to €9.4 billion at 31 December 2014, as a result of the increase in the fair
value of the financial instruments covering the provisions, reflecting the good performance of financial markets.
Therefore, at the level of the Poste Italiane Group’s consolidated financial statements, provisions amount to €87.1
billion.
Regarding the organisational structure, the process of strengthening the quality and size of the company's workforce
continued in 2014, given the constant growth in size and volumes. A number of activities designed to assist
development and ongoing functional and infrastructure improvement of the most important business support
systems also continued.
In particular, the company launched all the functional activities required to comply with the Solvency regulations
planned for 2016, including adaptation of its governance model and organisational and operating structure, with a
view to strengthening decision-making processes and optimising risk management procedures, in order to increase
and safeguard value creation. Moreover, given that May 2015 will see the start of the preliminary phase of the
Solvency II Directive, during which insurance companies will be obliged to meet the initial requirements under the
new regulations, the company also conducted significant planning, with organisational and IT implications, aimed at
meeting the objectives set out in the regulations from the beginning of the preliminary phase. Finally, planning
activities were launched at the end of 2014 aimed at creating and implementing a more up-to-date integrated
administrative and accounting system. This will enable more efficient and automated management of data
production processes and all the documentation connected with mandatory requirements, at the same
guaranteeing the completeness, accuracy and quality of data.
Once again in 2014, administrative costs continued to be far lower than the market average (0.5% of earned
premiums and 0.1% of provisions).
Gross profit for the year amounts to €568.5 million (€497.3 million in 2013). However, it should be pointed out that
net profit, amounting to €350.2 million (€253.7 million in 2013), was also positively affected by the lower overall tax
charge compared with the previous year, which was impacted by higher tax expense (IRES surtax) of approximately
€49.3 million.
In terms of capital, it should be noted that, on 30 May 2014, the company completed the issue of subordinated
bonds with a total nominal value of €750 million, placed in their entirety with institutional investors. The transaction
forms part of an overall plan to strengthen the company’s financial position, primarily in view of expected growth
over the two-year period 2014-2015, and the aim of maintaining a solvency ratio of at least 120% until the entry into
effect of the new capital requirements, contained in the Solvency II Directive, in 2016.
In September 2014, as part of the process of rationalising and optimising operations, designed to achieve synergies
within the insurance group, the transfer for consideration of the non-life insurance portfolio to the subsidiary, Poste
Assicura, was completed. The transfer regards non-life insurance products for the retail market, especially the
Postapersona Infortuni, Postapersona infortuni senior and Postapersona Salute products. The total value of the
portfolio was assessed as €292 thousand plus VAT.
During the year, the company continued to focus on the following priorities:
- exploiting new customer needs in the areas of welfare, healthcare, assistance and income security before and after retirement, developing a new insurance model that covers protection, savings, investment and pension needs at the same time;
- an upgrade of the offering, with a flexible approach to product and service management in terms of varying market conditions and customers' needs;
- optimisation of the network support model, including trials of new sales channels and commercial initiatives.
Premium revenue totalled €86.4 million (up 27% on 2013), with 347,000 new policies sold (323,000 policies sold in
the previous year).
These factors, together with the positive performance of net financial income and cost efficiencies, enabled the
company to report profit for the year of €7.3 million (€5.5 million in 2013).