Swiss Re Ltd. (SREN), the world’s second- biggest reinsurer, said the role of the insurance industry in Italy will grow as the government cuts spending on social benefits.
Swiss Re expects growth opportunities for insurers particularly in the “underdeveloped” non-motor lines of business because of the adverse macroeconomic environment, the Zurich-based reinsurer said in an e-mailed release today.
Italy, the world’s eighth-largest economy, must remain focused on budget discipline as it sets out a plan for policies to stimulate economic growth, Italian Prime Minister Mario Monti said last week. Monti, who imposed austerity in the first half of his 18-month term, is calling on ministers to formulate policies to pull Italy out of its fourth recession since 2001.
“The financial crisis has resulted in fiscal tightening and spending cuts which are accelerating the reduction and rebalancing of the welfare system in Italy, leaving a significant protection gap not only in health care and old-age provision, but also in natural catastrophe coverage,” said Kurt Karl, Swiss Re’s chief economist. “The insurance industry must prepare itself to take charge of its new, expanded role in Italy to support the state, private entities, and individuals in addressing some of their greatest economic challenges ever.”
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