A walk through bella Milano and the Italian insurance industry with Flavia Grilli

2023 marks the 50-year anniversary of HDI Global's Italian location. Congratulations! In a nutshell, how has the Italian branch developed over the last five decades and what is a major current goal?

I have been living insurance for 23 years. I saw the entire transformation of the company from Gerling to HDI-Gerling and then HDI Global SE. When I started in 2001, the company was very similar to a family company, although we were already quite international with many different branches and locations. However, we have completely changed our skills over the past 20 years and have become very strong in the Italian market in several industrial lines of business.

We are preparing to celebrate our 50th anniversary here in Italy. With my colleague in marketing, Erica Torre, we are arranging an event to both celebrate and increase visibility. We are working very hard on marketing and communication, which includes social media, especially LinkedIn, to increase visibility with the brokers, but also in the market in general. We want our competitors to know that we are here and capable. Part of that means selling our expertise. We now offer webinars for brokers to increase engagement. That allows us to increase our visibility as experts and it helps us create trust. This is especially important because our main client base is the middle market in Italy. That means we have to reach the highest possible number of partners, also the regional ones. Webinars are one good way to reach them.

The market in Italy is quite different from the German market. For one, we almost exclusively work with brokers, who are our main partners. We rarely have direct clients. Plus, the Italian market is very demanding with a high level of competition.

This is a time of particularly intense transformation. What are some of the current developments and driving forces that you are seeing in the insurance market, both on a global and local scale? How is the Italian branch meeting these challenges?

We could speak for hours about this topic because it's a very challenging time. The consequences of the pandemic, inflation, the war in Ukraine and the related difficulties surrounding business relationships with Russia are difficult to navigate. From an insurance perspective, we can say that the war in Ukraine is creating a huge number of problems with the rise in raw material costs. As a result, we must adjust our policies while taking into consideration that we are in the middle of inflation. Increasing premiums is a difficult task, but it's necessary. We must find solutions as to how to stay in the market and provide profitable results. It's challenging, but the good news is that it is the same for all other competitors. We are not alone, which makes this situation easier to handle.

Cyber risks are also a big topic. Cyber insurance is quite difficult to sell on the Italian market as most of our clients don't see it as a significant danger. We need to educate our clients more on these high risks, especially in Italy since we are not a highly digitalised country. Perhaps this is the reason why clients are not feeling the danger. While our larger corporate clients are more sensitive to these risks, we've realised that we need to educate our middle market. Many medium-sized companies are not well-positioned for cyber risks. The same goes for environmental pollution, which is where HDI excels in the Italian market because of our top-notch underwriters. The focus of our webinars is on environmental pollution. In this field, many industrial companies are not quite ready to transition yet as they are not really convinced of the risks. So, we are working on increasing awareness here as well.

Climate change is a very important issue as it is linked to increasingly stronger atmospheric events that impact the insurance and reinsurance markets. On the one hand, we are trying to promote local initiatives and organise some activities. However, we are also trying to work with clients who are adopting green policies and investing in greener infrastructure, particularly in the engineering and construction sector. That means cooperating with our corporate partners and brokers to better understand which green initiatives they are planning to implement in the next five years.

When it comes to our medium-sized clients and EU taxonomy, we are currently analysing the market and collecting more data about specific kinds of risks. Plus, the Italian government came up with the NRRP (National Recovery and Resilience Plan). As a result, many industrial companies will be taking steps towards reducing their environmental impact. With so many initiatives, we as insurance providers will be underwriting the new business activities driven by the reform, particularly in the construction and engineering lines. In fact, we are working with our technical experts in Milan to better understand the opportunities in terms of new business and increasing visibility.

It is a mix of very challenging situations that the insurance industry must face. Essentially, we are trying to have a positive impact while simultaneously creating new business.

HDI Global Italy recently won first place at the Insurance Connect Awards in the category of "Best Digital Initiative in the Accident Line of Business" with its self-service tool. Congratulations on that as well. Could you tell us a little bit about that project?

The project began about two years ago. Our jumping-off point was from our more straight-forward accident line, making it easier to create a digital solution. While it is a standard product, the self-service tool can be customised to the broker. So, the platform is always the same, but each broker receives a unique product within it. Brokers want to differentiate their offer, which I can understand. So, starting with only a few mainly regional brokers, we created a platform including specific tariffs and distinct policy wording. It's very easy to use. The strategic word here is "time". Brokers can save time, which is feedback we hear every day. The platform allows brokers to create a quotation on their own within minutes on any device.

This is the first high-performance digital solution we brought onto the market. Now we are thinking about extending this type of solution to other insurance products as well. As we are a company that creates tailor-made insurance solutions, it is not easy for us to standardise the products that we sell, so for us this is a double success.

You have an extensive background in marine insurance. Could you tell us a little bit about the particularities of the Italian marine insurance market?

The marine insurance business is mainly located in Genoa which is why we opened a branch there roughly seven years ago. But over the last years we also implemented a successful multiline approach, increasing our opportunities of business development.

Marine is my first love, for sure. I worked in the marine line until June 2021 – so, for nearly 20 years. It's a very challenging market because there is a high amount of competition with big players selling more or less the same kind of product that we sell on the marine market. We don't insure commercial ships but industrial companies and freight forwarders. Essentially, it's a closed market in which we have a foothold by selling mainly two products. But in the last 20 years we've always been in the top ten position. That means we are a strong competitor.

Experience is important in general, but in marine it plays an even bigger role because there are no tariffs. You need to be a very dynamic person as the rules change very fast due to the dynamic risks. Also, geopolitical problems weigh heavier in marine because you have to take wars or sanctions into account. In order to keep up to date, you need to be curious.

So, while marine is my first love, I also have to be dynamic again in order to understand other lines of business. In June of 2021, I decided to take on another role and become the distribution director for Italy. In my new role, it's so important to have 20 years of experience and a technical background. For one, I can speak to brokers on a different level because I've been an underwriter myself. I know the dynamics, the rates, inflation, etc. perfectly well. If you have a technical background, you have a completely different standing – especially as a woman.

What makes Milan a great location to offer insurance services to the Italian market? According to some statistics, Milan is considered one of the most liveable cities in Italy. What aspects of the city do you value in particular?

I was born in Milan, and I grew up here. For me it's the best city in Italy – obviously. From a business point of view, Milan is strategic. For one, it is a transport hub and has a direct connection to the port. Plus, all our peers and brokers are here. We need to remain connected to the regional branches and our Milan location allows us to manage our business – be it in Emilia-Romagna, Liguria or the north of Italy. Milan is the most important business city in Italy. The surroundings, for example, are quite industrial. In general, the concentration of the industrial segment is in the north, but Lombardy is the main region for the industrial sectors. Another interesting thing is that the Italian insurance market was born in Genoa. This proximity allows you to meet brokers who are 80 years old with vast experience. While Milan is the main city for business, there is also Turin, Padua and Bologna for insurance. We have a strong relationship with brokers and clients located in those areas. We obviously shouldn't forget all other important regions for business. Rome and Naples, for example, are also very important cities. We are improving our commercial activity in the entire Italian territory every year.

For me, Milan is the most European city in Italy because it is very multicultural. You can find every kind of nationality and every kind of religion with people coming for business, tourism and education. We have five different universities and a lot of foreign students here. It's a city that can offer you everything, from great cultural events to a high level of services. The city is always changing and growing fast. Compared to the Milan of 20 years ago, it’s a completely different city. Even the number of skyscrapers in the skyline has increased.

What do you enjoy most about your work?

Three things. First of all, I can work with all the colleagues in the Italian branch and not just those of a specific line. Secondly, it's dynamic. Within a single day, I jump from one topic or even project to another. And thirdly, I love learning new things.