The Italian Motor Insurance Market: Will the Recent Interventions Solve the Old Efficiency Problems?

Among the main European countries, Italy continues to be the one with the highest frequency of accidents and the highest average cost of damages. Moreover, there is a relationship between premiums and compensation costs: insurance premiums follow the trend of accident frequency and the average cost of claims. Therefore, this paper analyses the dynamics of the Italian insurance market in terms of premiums, claims and fraud. It then considers recent public interventions in relation to their efficiency in dealing with the problem of the excessively high level of premiums. Finally, an explanation is found for the weakness of competition and the distributional structure of Italian insurance companies