2018-2020 Business Plan

Cattolica 2020: tradition in motion

 

 

With the 2018-2020 Business Plan, Cattolica places innovation and agility at the centre of its strategy in order to face the challenges of a market where dynamics are being reconfigured, boundaries between sectors are blurring and the logic of the ecosystem is affirmed according to a model which has transformed from traditional damage/reimbursement to a more virtuous one with a greater focus on binomial prevention/protection.

 

Market trends and Cattolica's convictions

In the context of the market megatrends highlighted above, the Business Plan was developed, notably, with the following convictions / assumptions in mind:

  • The agency network will remain a central and primary competitive asset for the Companies, reinforced by the development of digital tools and channels.
  • Bancassurance confirms its central role in the Life sector, whereas within the Non-Life sector it will be one of the main drivers of growth, even in light of the shift of the banking business towards a fee based one in a persistent low interest rate scenario.
  • There is considerable space in the domestic market for the enrichment of the catastrophic sector proposal, which is also a consequence of the envisaged tax benefits.
  • There is a possibility of niche positioning between retail business and large corporate business (specialty lines).
  •  Wide scope for evolution in the use of data, especially in the automotive and health/elderly care sectors.

 

The pillars of the Plan

The Plan’s strategy stands on three pillars: profitable growth, technical excellence and innovation & data management. Simplification and cultural transformation of the Company cross cut the strategic actions and stand at the basis of the Plan’s pillars. The combined action of these drivers aims at exploiting the strengths already available within the Company and allowing the increase of its performance.

 

Cattolica can count on 5 key assets the Plan leverages on:

  1. Large and loyal customer base (3.6M customers, families and SMEs; +1pp of Motor TPL retention vs market). 
  2. Widespread coverage (1,500 loyal Agencies widespread all over the territory; Partnership with 2 out of the top 5 Italian banks).
  3. Motor business profitability (-4.5pp of Motor TPL loss ratio vs market; 4.9% Motor frequency vs 6.2% market average).
  4. Positioning on distinctive segments (Leader in the agricultural space; 8,500 voluntary entities insured).
  5. Solid capital position (-9pp financial leverage versus main players; SII ratio>180%).

 

Five improvement opportunities for the company:

  1. Innovation (Limited digitalisation; Traditional offering).
  2. Product and channel mix (46% Motor only customers; Focus on traditional Life products; Broker channel to be strengthened).
  3. Non-Motor profitability (+8pp Non Motor CoR vs market average).
  4. Life profitability (Limited Life profitability compared to peers).
  5. Productivity (Limited process automation; Complexity reduction).

 

The Plan will radically transform the Group thanks to the actions planned for each strategic pillar that, together with those actions of inorganic growth, aim at technical and operational excellence, profitable growth and new form of services for customers. The Life mix rebalancing actions (production change towards unit linked and traditional products with low capital absorption) as well as the Non-Life ones (focus on the development of the Non-Motor business), the benefits coming from the introduction of telematics, a new ad-hoc company for specific businesses, the contribution of the JV with Banco BPM, the process optimization activity and a stronger distribution model, will enable Cattolica to achieve ambitious targets at 2020.

 

Key financial target

 

The KPIs will be achieved through:

A tangible plan

  • Plan organised in 21 projects, already activated, people in charge appointed and targets assigned.
  • Targets under management’s control based on efficiency, technical excellence and external growth.
  • Investment approval driven by business case.

Strict governance

  • Close scrutiny of overall business plan projects under CFO responsibility.
  • Weekly steering committees with the CEO and project leaders.
  • Projects monitored weekly with dedicated KPI dashboard.

Resources involvement

  • Strengthened MBO aligned to Plan targets.
  • Multidisciplinary teams and best talents involved.
  • Enhancement of execution capacity throughtraining and selective recruitment.

Full transparency on strategy and execution of the Plan with annual updates to the markets.

 

Achieved results

 

 

Press Release - Investor Day: 2018-2020 Business Plan

2018-2020 Business Plan Presentation

 

 

Download 2014-2017 Business Plan