Introduction to SACE’s Reinsurance Plan
SACE, an integral entity within the Italian insurance and financial sector, is wholly owned by the Italian Ministry of Economy and Finance. In a significant development, SACE has declared that it will offer reinsurance services under market conditions, with coverage for indemnities reaching up to 50%. The overall limit for this coverage, dictated by the 2024 Budget Law, caps at €5 billion for the year 2025.
Understanding the New Insurance Mandate
In a recent move, the Italian government released an interministerial decree in the Official Journal, outlining fresh regulations for mandatory insurance against natural disasters and catastrophic events. This mandate, introduced through the new Budget Law, applies to every company with a registered office or permanent establishment within Italy, with the exception of agricultural enterprises.
Implications for Italian Businesses
According to Moody’s Ratings analyst Louis Nonchez, this regulatory shift is poised to “significantly boost” premium income, particularly from smaller businesses that have traditionally not opted for natural catastrophe insurance. SACE has emphasized that its guarantee aims to fortify the resilience of Italian companies against natural catastrophes, while also working to bridge the existing insurance gap.
Details of SACE’s Reinsurance Guarantee
Elaborating on the specifics of the new guarantee, SACE stated, “The guarantee is issued in favor of insurers and reinsurers authorized in Italy to cover natural catastrophe risks, offering coverage of up to 50% of the insurance indemnities that companies will disburse to insured Italian firms following natural catastrophe events as stipulated by the insurance policy.”
Collaboration and Future Prospects
SACE concluded by highlighting the collaborative effort required to bring this initiative to fruition. “The establishment of this new operation has been realized thanks to the partnership among various stakeholders within the Country System, who have pooled their expertise to effectively address the needs of enterprises, enhance their credit sustainability, and streamline the processes associated with catastrophic events.”
