ASSICURAZIONI GENERALI/UNICREDITO (Conclusion of full phase investigation)
PRESS RELEASE
The Italian Competition Authority ruled that the agreement signed on January 10th, 1996, between Assicurazioni Generali and Unicredito, regarding the creation of a joint venture named Casse and Generali Vita and the distribution of life insurance products through Unicredito's agencies, violated Section 2, subsection 2 of Law no. 287/90. Such a decision was based on the ground that, in consideration of the economic and legal framework in which the operation occurred, the agreement was deemed to prevent market access in the provinces of Belluno, Vicenza and Treviso.
Assicurazioni Generali ranks first in the Italian insurance market, with premiums amounting to 9,569 billion lira in 1995. Unicredito is the holding company of the homonymous banking group, including Cassamarca and Cariverona Banca. In Italy the Group runs a network of 477 agencies and works mainly in Veneto, where it is present with 318 agencies.
The analysis conducted during the investigation showed that the production and distribution of insurance products were characterized, both at the local and national level, by high barriers to entry. In fact, the law in force defines strictly the types of financial professionals who are entitled to sell policies (agents, brokers, financial promoters). Further, the number of such operators is limited by the regulation of access to the relative professions, which requires the membership to special associations. In addition, all the professionals mentioned above, except for brokers, who operate mainly in the field of damage insurance, have to work exclusively for a single company de facto or de jure. The banking channel is also tied to insurance companies in an exclusive way.
In this framework, the agreement between Generali and Unicredito would restrict substantially market access to the production and distribution of insurance products in the provinces of Belluno, Treviso and Vicenza, given that in such areas the largest life insurer would acquire the most important banking network. More precisely, the agreement would have anticompetitive effects in the province of Belluno, where the Unicredito Group holds a market share of 53 per cent, with 60 agencies, and the Generali Group leads the life insurance market with a share of 48 per cent. The same restrictive effects would occur also in the provinces of Vicenza and Treviso, where Generali holds appreciable market shares respectively equal to 19% and 27%, and Unicredito is the largest banker with 80 gencies
in Vicenza and 83 in Treviso, and whose market shares are respectively equal to 25% and 22%.
Thus, in virtue of the agreement, Generali would hold a dominant position in the provinces above so as to restrict substantially the entry of new insurance firms and limit the choice of consumers who will not be able to find easily products offered by Generali's competitors. Therefore, the positive effects of the bancassurance would be cancelled by the likely potential independent conduct of Generali, to the detriment of competitors and consumers.