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

Since the political unification in 1861, the Italian insurance sector has long been characterised by a certain degree of backwardness, quite consistently with the related macroeconomic and institutional features. Particularly, as a long-term characteristic of this industry in Italy, the relatively lower income per capita levels, compared with the core of Europe’s, at the time of her political unification affected the relative low propensity to insure in the very long run, typically in the life insurance segment. Actually, the Italian insurance market shows a very long-term tendency to be an underinsured market, even when incomes per capita began to grow steadily from the early twentieth century, probably associated to relatively modest levels of schooling, influencing social capabilities, and competing state-backed assistance schemes emerging with the first experiences of welfare state. In such an overall framework, the reinsurance segment was doomed to remain marginal, although there are also different reasons explaining its small size and functional underdevelopment. The first reason why reinsurance stayed marginal in Italy was the general development trajectories that reinsurance had in Europe throughout the nineteenth century, 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 mediumsized companies and, on the other hand, the two large transnational companies dominating the market. In effect, reinsurance appeared as an out-of-reach objective for a slowly catching-up domestic industry, on the one side, and a sort of duplicate for the two largest companies which were consistently engaging themselves along alternative strategies, on the other side.