AGCM

PRESS RELEASE

ANTITRUST AUTHORITY (AGCM), THE AUTHORITY FOR ELECTRICITY, GAS AND WATER SUPPLY SYSTEM (AEEGSI) AND THE ITALIAN INSURANCE SUPERVISORY AUTHORITY (IVASS) TOGETHER TO SAFEGUARD CONSUMERS ON POLICIES LINKED TO THE SUPPLY OF ENERGY AND WATER

The offices of the Antitrust Authority, the Authority for Electricity, Gas and Water Supply System and the Italian Insurance Supervisory Authority have launched a joint technical analysis – on a sample of 20 commercial packages (offered by 13 insurance companies and 19 operators in the energy and water sectors) that combine insurance policies and the supply of electricity, gas or water – meant to verify the extent of fairness and transparency of these offers and their effective respect for the rights of consumers.

This initiative follows the outcome of the investigation "You are insured but maybe you do not know” (Sei assicurato e forse non lo sai) that was carried out by the Italian Insurance Supervisory Authority in recent months, from which it was observed that there are policies that are linked to services and products of various kinds, with possible critical issues for consumers that are linked to the procedures of the offer, to the actual awareness of the existence of the policy and its resulting enforceability in case of need.

All the information collected by the offices of the three authorities seeks primarily to quantify the size and to clarify the overall characteristics of the new and growing phenomenon of offers that combine the supply of energy and water services to insurance products.

At the same time, an evaluation is under way on the timely compliance by operators and insurance companies, the current regulations (especially of the Consumer Code) and sectoral regulations. For example, the information required from operators concern issues such as the adequacy of information of the end-user, the importance of the insured risk, the possible presence of unfair terms.

The first evidence shows that there are about 2 million consumers who possess an insurance policy that is combined with the supply of energy and water services. Insurance premia collected since the launch of these offers amount to approximately €33 million.

The energy sector (electricity and gas) gathered the higher amounts, both in terms of premia (over €28 million) as well as in terms of the number of insured persons (1.5 million). One of the operators of the sample that was analysed offers a policy with the cost being met by the client, that is equivalent to about €70 annually for the electricity sector and €40 euro annually for the gas sector. In other cases (of lesser significance in terms of the amount of premia collected) the policies are offered as free to the user. In the energy sector policies are offered to clients on the open market: in cases where the cost is borne by the customer, the items that are covered include breakdowns by electrical equipment (electrical panel, switch, etc.) and gas (“post counter escape” on supply pipes inside residences). Free policies generally guarantee technical assistance inside a residence (the urgent dispatch of plumbers, locksmiths and other skilled professionals, hotel expenses in case of need, etc.). Other free policies envisage the reimbursement of the cost of the bill in the case of loss of employment or invalidity/incapacity; a case was also discovered of an insurance policy that offers roadside assistance and vehicle replacement.

In the water sector instead the insurance cover of the analysed sample is fully at the expense of the user, with costs varying from €3 to €15 annually (domestic households). In this sector coverage is mainly given to abnormal consumption that is reflected in bills and arises from hidden water leaks.

In the last year of operation of the offers, compared with 2 million policyholders, 14,120 claims were raised. The claims ratio (the relationship between claims and policies taken out) amounts on average to 0.2% for the water sector and to 0.9% for the energy sector; insurance companies have rejected 32.1% of claims (33.4% for the energy sector and 5.8% for the water sector) and have incurred costs for claims for €4.2 million (13% of premia collected).

Following the joint review, appropriate actions are being defined within the competence of each Authority aimed at ensuring that:

a) the outline of policies to consumers (insured risk, coverage, exclusions, procedures to activate a policy, withdrawal) is conducted in such a way as to guarantee an informed choice;

b) procedures for the collection of subscriptions to insurance policies against payment are correct;

c) there is an effective awareness by consumers regarding the existence of guarantees;

d) it will be easy for clients to request compensation and, whenever due, to obtain this compensation.

Rome, 2 July 2015