Name
Global FinTech Guide
Country _ Name
Italy
SectionTitle
InsurTech
Body
InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.

Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.

Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.

Introduction 

Attitude of the country towards InsurTech-services

InsurTech solutions and related services are rapidly increasing their presence in the Italian market. A particular attention is paid by regulator to the data privacy related issues as well as to specific issues raised by InsurTech, like cyber security risks and potential discrimination in connection with the pricing of insurance premiums

Legal affairs

Obligations and requirements to provide InsurTech-services

InsurTech firms which underwrite insurance or reinsurance risks are subject to the prior authorisation by the local Insurance Regulator (Istituto per la Vigilanza sulle Assicurazioni – IVASS) under Section 13 of the Italian Private Insurance Code (Legislative Decree no. 209/2005 providing the Codice delle assicurazioni private – CAP).

To obtain the authorisation, it is required, among others, that these entities are incorporated either as joint stock company (società per azioni), cooperative (società cooperative), mutual insurance company by shares (società di mutua assicurazione per azioni) or European company (società europea) and that they have their administrative offices in the Italian territory. Specific rules provided by Sections 23 and 24 of the CAP shall apply to the insurance companies established in an EU Member State. Specifically, the establishment of a branch by an EU insurance company must be preceded by a notification to IVASS submitted by the competent authority of the Member State where the insurance company is established. The branch shall be established after the receipt, by the EU Member State authority, of the communication from IVASS or, absent such communication, after 30 days following the notification.
 
Similarly, a notification to IVASS by the competent authority of the Member State where the insurance company is established shall be necessary to provide insurance services in Italy under the regime of the freedom to provide services in the EU.

Moreover, insurance companies are required to maintain, among others, certain minimum capital requirements equal to:

  • EUR 2,500,000 for non-life insurance companies – but occurring specific circumstances the minimum capital requirement shall be equal to EUR 3,700,000;
  • EUR 3,700,000 for life insurance companies; and
  • EUR 6,200,000 for insurance companies that provide both non-life and life insurance products.

InsurTech firms which carry out non-underwriting activities (such as claims handling, or IT-related services) benefit from a lighter regulatory regime since they are not subject to prior authorisation and may operate as outsourcers of insurance undertakings. Certain regulatory requirements are, however, to be met by insurance outsourcers, especially when it comes to critical activities to be o
utsourced (see IVASS’s Regulation 38/2018).

As long as InsurTechs qualify as insurance intermediaries (e.g. brokers or agents), those firms are entitled to carry out business locally only upon enrollment with the IVASS’s Insurance and Reinsurance Intermediaries Register. As such, InsurTech firms are required to comply with specific conduct rules relating to the distribution of insurance products which were recently enacted following the implementation of the Insurance Distribution Directive EU 2016/97 (see IVASS’s Regulation 40/2018).

Additional comments regarding the legal situation for InsurTech-services or what InsurTech’s must be aware of in this business area

The use of FinTech services (especially IoT) by established insurance companies is becoming increasingly widespread among the local players. The most common means for insurers to benefit from FinTech are outsourcing tech-related services to leading IT providers or partnering with innovative digital start-ups. Normally, the aims of the use of IoT in particular are enhanced risk management by insurance companies and superior customer experience.

IoT, indeed, allows the offer of more customised products, lowering the premiums paid in connection to positive behaviors, which are detected by the IoT device. 

Such mechanisms might be, however, critical from a customer protection perspective, as well as regarding cyber risks. It is worth noting that the last IVASS’s Annual Report considers cyber and InsurTech risks as ones of the most relevant to Italian insurers.

As for new regulatory paths, IVASS is reportedly working on a specific insurance Alternative Dispute Resolution scheme aimed at increasing insureds’ protection, as mentioned under the IVASS’s 2020 Strategic Plan.

Economic conditions

Market size for InsurTech-services and biggest companies in this business area

InsurTech services are commonly offered by several insurance companies, often by means of outsourcing, and by a few startups. IoT as well as smart contract systems are used in the non-life sector and especially in the accident&health and travel, and motor liability coverage.

The biggest local player is “PrimaAssicurazioni” an insurance agency platform.

Additional comments regarding the economic situation for InsurTech-services or what InsurTech’s must be aware of in this business area

N/A.

 

Authors

Close

Choose country