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El modelo de seguros en Italia e implementación de un Instrumento de Estabilización de Ingresos
Simone Severini – [email protected]
JORNADA: PERSPECTIVAS Y VIABILIDAD DE LOS SEGUROS DE RENTAS O INGRESOS EN ESPAÑA Y EN LA UNION EUROPEA
Madrid, 14 de junio de 2016
Escuela Técnica Superior de Ingeniería Agronómica, Alimentaria y de Biosistemas
Outline
1. Background: farm insurance system in Italy
2. Application of the CAP reform in Italy
2.1. Overview
2.2. News regarding insurances
2.3. Application of the Income Stabilisation Tool
3. Conclusions and perspectives
1. The farm insurance system in Italy
1. The farm insurance system in Italy
Structure of the market for subsidised farm insurances in Italy:
Main players
Farmers, organised in Consorzi di Difesa
Insurance Companies (Around 17 in 12
groups)
National Government
(Mipaaf: CAP and FSN)
Public and private reinsurances (ISMEA and reins. Companies)
Private brokers
Role of the Consorzi di Difesa (CdD)
Most agricultural insurances managed by CdD
CdD: farm cooperatives providing services to farmers including:
administrative procedures regarding CAP policies,
But also:
collective bargaining with insurance companies (Demand concentration)
financial anticipation
consultancy regarding the choice of the insurance contracts: by means of private brokers.
National Association of CdD: ASNACODI.
Importance of farm insurances:
(Mln. €) 2005/06 2007/08 2009/10 2011/12 2013/14 2015p
Insured value 3896.3 5274.5 5726.4 6695.3 7616.8 7443.9
Premiums 267.1 315.5 301.4 330.3 431.2 402.1
Indemnities 153.0 228.7 202.0 223.4 295.1 233.0
Source: ISMEA (2016).
Total
(Thousands)
Insured
(%)
Farm Census:
Total 1620.9 5.2
Farms with sales 1037.2 8.2
Chamber of Commerce 829.1 10.3
VAT 473.1 18.0
Professional farmers ^ 316.5 26.9
Insured farms (Estimate) 85.0 100.0
^Imprenditori a ti tolo principa le e coltivatori di retti .
Source: Own elaboration on Artzeni and Sotte (2013) and ISMEA.
Types of insurance contracts
Mainly crop insurances
Farm structures and livestock productions are growing
2005/06 2007/08 2009/10 2011/12 2013/14 2015p
Crops 265369 310902 321524 302941 318841 382370
Farm structures 1261 2721 3364 4133 4850 6922
Livestock prod.s 450 1851 2747 5128 6619 12842
Total 267079 315474 327635 312201 330309 402134
Crops 99.4 98.6 98.1 97.0 96.5 95.1
Farm structures 0.5 0.9 1.0 1.3 1.5 1.7
Livestock prod.s 0.2 0.6 0.8 1.6 2.0 3.2
Source: Zaccarini Bonelli (2016).
(Thousands of €)
(%)
(Tot. premiums)
Importance of farm crop insurances:
While a limited number of contracts
A not negligible share of crop production value is insured
This share has increased over the recent years
Value of
production
Insured
values
(Approx)
Insured/Prod
uction Val.
(Mln.€) (Mln.€) (%) Approx.
26,740.5 5,600.9 20.9
Source: Zaccarini Bonelli (2016). Year 2015 (provisonal).
Wineyards 38,533
Other crops 127,270
Livestock 22,634
Total 188,437
How much farmers pay: Average premiums (Premiums/Insured values) (%)
2005/06 2007/08 2009/10 2011/12 2013/14 2015p
Crops 7.4 7.0 6.2 5.9 6.8 6.8
Farm structures 0.6 0.6 0.7 0.7 0.8 0.8
Livestock prod.s 0.5 0.5 0.7 1.0 1.3 1.3
Total 6.9 6.0 5.3 4.9 5.7 5.4
Source: Zaccarini Bonelli (2016). Year 2015 (provisonal).
Main problems:
Market has been concentrated on:
• Large farms
• Few crops
• Hail insurances (policy problem)
• North of Italy
Type of insured crops
A limited number of intensive crops, grown on specialised farms in the north of Italy
Farm insurances are used mainly in the North of Italy
Value of productionInsured/Pro
duction Val.
(Mln.€) (%) (Mln.€) (%) (%) Approx.
North 10,803.4 40.4 4760.8 85.0 44.1
Centre 4,338.1 16.2 336.1 6.0 7.7
South 11,599.0 43.4 504.1 9.0 4.3
Total 26,740.5 100.0 5,600.9 100.0 20.9
Insured values
(Approx)
Source: Zaccarini Bonelli (2016). Year 2015 (provisonal).
Shift from hail insurance (single-peril) to pluri-peril (i.e. >1) and multiple-peril insurances
2. Application of the CAP reform in Italy
2. Application of the CAP reform in Italy
2.1. Overview
2.2. Insurances
2.3. Income Stabilisation Tool
2.1. Overview
In Italy each region has its own RDP (21) + a National RDP (8.9% of the Italian budget)
Risk Management measures are included within the National RDP
Activated all three RM instruments:
Farm insurances
Mutual funds
Income Stabilisation Tool
Financial resources in NRDP:
2/3 for Risk Management, mostly farm insurances
Very limited share to MF and IST
National Rural Development Programme (2014-2020)
EU National
Measure: (%)
Water resources 130,950 160,050 291,000 14.0
Biodiversity: preservation 45,360 55,440 100,800 4.9
Biodiversity: cooperation 41,940 51,260 93,200 4.5
Risk management 715,860 874,940 1,590,800 76.6
of which:
Insurance premiums 628,560 768,240 1,396,800 87.8
Mutual funds 43,650 53,350 97,000 6.1
Income Stabilisation Tool 43,650 53,350 97,000 6.1
Total resources NRDP 934,110 1,141,690 2,075,800
Total
(Thousands of €)
To avoid overcompensation:
Control by means of the Sistema di Gestione del Rischio (SIAN platform).
For each single farm (Farm code), the SGR includes information on:
• Piano Assicurativo Individuale
• Piano di Mutualizzazione Individuale
• Piano di Stabilizzazione del Reddito Individuale
2.2. Farm insurances: what’s new?
Types of risks
Coverage: no single-peril contracts. Only combinations of events
Types of risks:
1. CROP PRODUCTIONS
1.1 catastrophic weather risks (3)
1.2 other weather related risks (6)
1.3 plant diseases (24)
1.4 parasitic infections (6)
2. LIVESTOCK PRODUCTIONS
by species (Almost all, including bees)
Compulsary risks
Optional risks
1.1 Catastrophic weather risksflood
drought
frost and hoarfrost
1.2 Other weather risks
1.2.1. Frequent WRs
excessive snow
excessive rain
hail
high winds
1.2.2. Accessory WRs
sunstroke and warm wind
thermal shock1.3 and 1.4: no insurance contracts available
1.1 Catastrophic weather risksflood
drought
frost and hoarfrost
1.2 Other weather risks
1.2.1. Frequent WRs
excessive snow
excessive rain
hail
high winds
1.2.2. Accessory WRs
sunstroke and warm wind
thermal shock
5 combinations of risks
No single-peril contracts. Only combinations of events
Coverages for crop productions:
Combinations:
a b c d e
Catastrophic weather
risksAll All no All
Only
frost
Frequent WRs (incl. hail)All >1 >3 no >3
Accessory WRs All no possible no possible
Market share in 2015^ 14% 8% 2% 0% 76%
Source: Zaccarini Bonelli (2016).
2.3. Application of the Income Stabilisation Tool in Italy
Policy objectives:
expand the use of RM tools, especially in: centre and south of Italy, other farm enterprises, small farms
IST as additional to farm insurances: P risk, too
Policy decisions:
to begin, but with a limited amount of resources
Problems faced:
limited number of active Mutual Funds (MF)
lack of legal definition of MF (EU Regulation)
approach to quantify income losses
Legal definition of MF:
Ministerial Decree (April 2016) regarding: accreditation, constitution and management of MF eligible to receive support provided by RDP
Accreditation: by the Italian Ministry of Agricuture (Mipaaf)
Two types of MF or activities of a MF:
• Climatic and environmental risks (Art. 38 of Reg. (EU) n. 1305/2013)
• IST (Art. 39 of Reg. (EU) n. 1305/2013)
Duration of the MF: > 5 years
Participation of farmers to MF: > 3 years
Minimum size of the MF:
> 150 farmers or
> 50 farmers if > 10 mln € of revenues
Management of MF:
Who can develop a MF:
Consorzi di difesa or their associations
Farm cooperatives and consortia
Producers Organizations
Networks of firms / farms
Non-profit
Several aspects including afiliation of farmers, functioning, how to close a MF, criteria to assess losses and to calculate indemnities
Separate accounting for MF activities
Initial capital stock; statements of cash in and outflows
Assessment of income:
Accounting is not required in Italy (apart large companies)
Guidelines by the Ministry of Agriculture:
Based on Value Added account statements
Gross Farm Income = Revenues – Input costs
Revenues and costs only related to agricultural products: i.e. not agriturism, energy production and so on
Revenues includes subsidies
Input costs: purchased inputs only. Adjusted in the case of investment goods; it excludes general costs, extraordinary maintenance
3. Conclusions
Perspectives for the farm insurances and the IST in Italy
Insurances (Currently around 20% of potential farms):
No further increase in the North
Danger: pluriperil insurances vs. not subsidized hail insurances
Possible increase in the South: lack of knowledge
MF and IST:
A limited increase of the number of MF is possible, but:
MF management problems, including:
Public support: no for the establishment of the fund and limited for management costs (i.e. few years)
Lack of knowledge (e.g. identification of adequate premiums/contribution)
Lack of knowledge / trust on the farmers side.
El modelo de seguros en Italia e implementación de un Instrumento de Estabilización de Ingresos
Simone Severini – [email protected]
JORNADA: PERSPECTIVAS Y VIABILIDAD DE LOS SEGUROS DE RENTAS O INGRESOS EN ESPAÑA Y EN LA UNION EUROPEA
Madrid, 14 de junio de 2016
Escuela Técnica Superior de Ingeniería Agronómica, Alimentaria y de Biosistemas
