Fondiaria-SAI cuts first half loss as it refines motor book in Italy

ITALIAN insurer Fondiaria-SAI, which has spent much of this year coping with a too-small capital base, gave the markets some good news with the announcement its net loss for the first half had been cut to €61.9m ($89.7m), from €144.8m in the same period last year. The non-life division lost €91m pre-tax, compared with a pre-tax loss of €221m in 1H 2010. Non-life premiums were cut 1.2% year on year to €3.65bn, while premiums in the life division were down 31% year on year to €2.56bn. Motor third party and liability (TPL) claims were down 13.1%. The insurer said “the target of growing average per-vehicle motor TPL premium was achieved through tariff charges, reduced flexibility and tighter controls on group policies”. It also said the “significant decrease” in reported claims followed “extensive action taken on portfolios in problematic areas and the stepping-up of measures taken to counter fraud”. This helped Fondiaria-SAI reduce the combined ratio for 1H 2011 to 101.9%, from 105.4% in the same period last year. The decline in life premiums was mainly owing to a fall at Popolare Vita (down 39.3% year on year). At Fondiaria-SAI, there was a 4.7% decline in life premiums, which the insurer said was “well ahead of the general market trend”. The life division booked a pre-tax gain of €74m, down from €107m in the same period last year.