Few and Small: The Reinsurance Industry in Italy in the Twentieth Century

In the long run, the Italian insurance sector has been characterised by a certain degree of backwardness. The insurance market shows a long-term tendency to be an underinsured market, even when incomes per capita began to grow steadily from the early twentieth century. In these circumstances, the reinsurance segment was doomed to remain marginal, although there are different reasons explaining its small size and functional underdevelopment. The first reason is represented by the wider trajectories that reinsurance had in Europe, particularly from the mid-1850s, making Italy a marginal actor within the emerging international market structure. The second reason was the dualistic nature of the Italian insurance sector, deeply divided between, on the one hand, a number of small- to medium-sized companies and, on the other hand, the two large transnational companies dominating the market, Assicurazioni Generali and RAS, which adopted co-insurance practices in order to hedge their risks and spread their insurance liabilities. This chapter presents, in its first section, a few data on the insurance sector as a whole in the twentieth century, by looking at insurance indicators since the early 1920s and at individual balance sheet data for the entire insurance sector for a string of benchmark years covering the whole century, from 1903 to 2000. The second section deals with the evolution of the insurance industry in Italy since the late 1820s to understand why reinsurance was a marginal branch. The third section highlights main factor conjuring for its underdevelopment after the Second World War in relation with dynamics typically pertaining to the emergence and partial retrenchment of the welfare state.