Alleanza Assicurazioni S.p.A. History
Telephone: 39 02 62961
Fax: 39 02 6552356
Sales: $58.64 billion (2003)
Stock Exchanges: Borsa Italiana
Ticker Symbol: AL
NAIC: 524113 Direct Life Insurance Carriers; 524114 Direct Health and Medical Insurance Carriers; 524126 Direct Property and Casualty Insurance Carriers
To operate in today's market requires not just suitable products able to satisfy the diversified needs of customers, but also highly qualified human resources and state-of-the-art technologies. With this in mind, aware of the innovations that serve to constantly enhance customer service, Alleanza devotes an ongoing commitment--together with the professional training of its Consultants--to the development of Information Technology, in keeping with the High tech-High touch business model on which the Company has based its role in the market.
- Evan Mackenzie founds Alleanza Assicurazioni in Genoa, which begins offering insurance products, including life insurance policies.
- The Italian government forms the INA life insurance monopoly, which takes over Alleanza's life insurance business.
- INA loses its monopoly on the life insurance sector and Alleanza reincorporates, now focusing wholly on the life insurance market.
- Assicurazioni Generali acquires majority control of Alleanza; new head Mario Gasbarri introduces a new streamlined corporate structure and popular fixed-rate life insurance policies.
- Alleanza Assicurazioni goes public on the Borsa Italiana.
1980s:In response to high inflation rates, Alleanza launches index-linked policies and revaluable policies.
- After banks are allowed to sell life insurance, the company acquires a stake in Banco Ambroveneto and enters an agreement to provide life insurance products to the bank's customers; Alleanza acquires La Venetia from Generali and begins offering asset management services.
- Fondi Alleanza is created, as the company enters the mutual fund market.
- Banco Ambroveneto merges with Cariplo, creating Banca Intesa, and Alleanza gains control of Cariplo's Carivita life insurance subsidiary.
- The company establishes new sales network of Financial Advisors.
- Alleanza and Intesa agree to merge their bancassurance operations, creating Intesa Vita, held at 45 percent by Alleanza.
- Alleanza becomes the top life insurance company in Italy.
Alleanza Assicurazioni S.p.A. is Italy's leading life insurance company and the largest publicly listed company focusing almost exclusively on the domestic life insurance market. The company boasts more than two million customers, generating some EUR 4.2 billion ($5 billion) in premiums. The company is present throughout Italy with a network of more than 320 sales offices, backed by over 3,200 employees and 20,000 commission-based sales agents, as well as 1,000 specially trained and certified financial advisors. Agency sales, together with sales made through financial advisors, account for nearly half of the group's total premiums. The single-largest outlet for the group's insurance, assets management, pension, and related products comes through the bancassurance channel, and particularly through the company's 45 percent holding in the Intesa Vita joint venture set up with Intesa in 2003. Alleanza Assicurazioni typically targets the lower to middle-class consumer segment, providing door-to-door service, and boasts an especially strong penetration of Italy's rural provinces. Founded in 1898, Alleanza has long been majority-owned by Assicurazioni Generali, Italy's largest insurance company. The company is headed by Chairman Sandro Salvati and CEO Franco Viezzoli and is listed on the Borsa Italiana.
Pioneering the Italian Life Insurance Industry in the 1890s
Alleanza Assicurazioni was founded in 1898 by a group of investors led by Evan Mackenzie. Mackenzie, who was born in Florence at the middle of the century to Scottish parents, had already built a distinguished career in the insurance industry, acting as the Italian representative for a number of foreign insurance companies. Based in Genoa, Mackenzie worked for such European insurance institutions as France's Union, England's Merck Fink & Co., and the German-Austrian company Munchener Ruckversicherungs Gesellschaft, the latter giving Mackenzie experience in the reinsurance market as well.
Mackenzie set up a number of companies on his own as well, such as Iniziativa Insurance Company, which issued policies for workers' insurance, in 1891. Into the next century, Mackenzie's companies included Ausonia, a reinsurance specialist, founded in 1903, and La Consorziale, providing reinsurance and retrocession services, in 1918.
Yet Alleanza Assicurazioni became Mackenzie's most lasting success. The "insurance alliance" united backers such as the Italian Credit Bank, Berlin-based Nationalbank fur Deutschland, and Rome's Manzi & Co., with Mackenzie as the company's first director. Alleanza initially operated in the broader insurance market, issuing policies in a range of fields, such as transport, health, and accident insurance. Yet the company was also one of the first Italian insurance companies to begin issuing life insurance policies.
Until the end of the 19th century, the Italian economy remained dominated by agriculture. The move toward industrialization at the beginning of the 20th century, and the creation of a rising working class, led to a new level of demand for insurance products, and particularly life insurance policies.
Life insurance quickly became a primary focus, as the company attracted a growing number of customers. As it entered its second decade in business, Alleanza already had sold some 13,000 policies. Alleanza also distinguished itself through its progressive social policies. The company became one of the first to employ women in its administration, and also provided healthcare, medical assistance, and free medicine to its staff.
Yet Alleanza faced near disaster in 1912 when the Italian government, under Giolotti, nationalized the life insurance sector, setting up the Istituto Nazionale Assicurazioni (INA) to take over all existing life insurance policies in the country. The purpose of the monopoly was to prevent foreign insurance companies from gaining undue influence in Italy's financial markets. The move spelled the end of a number of insurance companies, which withdrew from the Italian market. Alleanza, in the meantime, was forced to fall back on its non-life insurance operations.
These were not enough to shield the company from difficulties during and especially immediately after World War I. Indeed, for a time, Mackenzie, who remained at the head of the company, had even begun to consider shutting the company down as it struggled in the postwar period.
Nonetheless, Mackenzie held on, and in 1923, the INA, itself hit hard by reconstruction payments and by the growing political unrest, abandoned its life insurance monopoly. With the market once again opened to competition, Alleanza was reorganized. Now, the company exited its other insurance markets and instead focused exclusively on its life insurance products.
Life Insurance Specialist in the Mid-20th Century
Alleanza continued to grow slowly through the rest of the 1920s. At the beginning of the 1930s, as it struggled through the Great Depression, Alleanza found new financial backing with Assicurazioni Generali, which bought majority control of the life insurance specialist. Generali, founded a century earlier, had long held a position as a major European insurance group. After becoming a full-fledged Italian company in 1913, Generali built itself into Italy's predominant insurance group. The change in ownership led to Alleanza's emergence as the country's preeminent life insurance provider.
Following the sale to Generali, Alleanza appointed a new general manager, Mario Gasbarri, who was to remain at the head of the company into the late 1970s. Gasbarri restructured Alleanza, creating a decentralized organization that received much of the credit for the company's success. The company began establishing a network of sales agencies, which, while remaining under corporate control, were operated more or less autonomously. Agency heads received a basic salary, yet had the potential to double their pay upon meeting corporate sales targets.
The company also introduced a pyramid-like sales structure. Placed under the head of the agency were several salespeople, who also received a large percentage of their income based on their performance and on the performance of the sales agents in their charge. Sales agents in turn were paid entirely on commission, and often worked only part-time. In this way, Alleanza was able to maintain a lean corporate structure, and yet deploy a large, motivated, and mobile sales force. The company soon achieved a high degree of penetration, with a strong geographic balance and a particularly strong presence in the country's rural provinces.
Under Gasbarri, Alleanza also oriented itself firmly as a provider of popular life insurance policies for the country's lower to middle income classes. Gasbarri, and Alleanza as a whole, became an important proponent of the need for developing savings among the lower and working classes, and especially the need for creating retirement pension plans. The company launched a new series of policies based on fixed monthly payments that the company collected by sending its agents door to door.
Forced to shut down during World War II, Alleanza returned to business in the second half of the war. The economic boom years of the 1950s and 1960s led to a boom in the life insurance market, and Alleanza grew strongly into the 1970s. In 1971, Alleanza listed on the Borsa Italiana, although Generali remained the group's major shareholder and maintained its majority control of the company into the late 1990s.
Developing New Sales Channels: 1990s-2000s
Changes in the economic situation, brought about in part by the oil crisis in the 1970s, and the high inflation rates of the period, led Alleanza to drop its fixed-rate popular policies and instead launch a new set of index-linked policies. The company continued to roll out new products through the 1980s, such as its DR revaluable policy.
The arrival of Alfonso Desiata as the company's chairman in 1990 heralded the beginning of a new growth period for the company. Under Desiata, Alleanza saw exponential growth in its premium collections--from the equivalent of EUR 300 million in the mid-1990s, the company's premium totals topped EUR 2 billion by the end of the 1990s and passed EUR 4 billion by the beginning of 2004.
Part of the motivation behind Alleanza's growth spurt was new legislation authorizing Italy's banks to begin selling life insurance products at the beginning of the 1990s. Faced with this new competition, Alleanza responded by acquiring a 16 percent stake in Banco Ambroveneto and striking a deal with the bank that established Alleanza as its exclusive provider of life insurance products. The deal gave Alleanza access to Ambroveneto's 500-strong branch banking network (later expanded to 650 branches) and also introduced it to an important new sales channel. Indeed, while its agency sales remained an important contributor to its revenues, bancassurance sales quickly became a major outlet as well, reaching nearly half of the group's sales by the beginning of the next decade.
At the same time, Alleanza began expanding its range of products and services. The company added an assets management operation, acquiring La Venezia in 1993 from parent Generali. That acquisition enabled the company to begin marketing investment products through its new subsidiary's 300-strong network of financial promoters. In 1995, Alleanza launched a new product group, that of mutual funds, establishing Fondi Alleanza. That operation later built up a portfolio of nine different funds. On the life insurance side, Alleanza began developing a new range of life insurance policies targeting specific market segments--such as families with small children, or middle-aged men seeking fixed-duration policies.
New expansion for the company came in 1997 when Banco Ambroveneto merged with Cariplo, forming Banca Intesa. The merger gave Alleanza access to Cariplo's life insurance operation, carried out as Carivita, and its network of 1,600 sales branches. As part of the merger agreement, Alleanza acquired a 50 percent direct stake in Carivita, in addition to an 8 percent stake held through its interest in Ambroveneto. For the time being, however, the company's bancassurance operations remained separate from those of Intesa.
The diversification of Alleanza's operations and product portfolio led the company to create a new class of sales agents called Financial Advisors in 1998. Recruited in large part from the company's own staff, the financial advisors were given special training and certification; the new program quickly became an important revenue stream for the company, nearly matching that of its sales agent network. Meanwhile, after Salvati left the group to become head of the Italian insurance association ANIA, the company appointed Sandro Salvati as its new CEO.
Into the new century, Alleanza's growth remained strong. Sales leapt from EUR 2.5 billion in 2000 to more than EUR 4 billion in 2004, despite the difficult economic climate. In 2003, the company at last moved to merge its bancassurance business with that of Intesa, creating a three-way venture, together with France's Crédit Agricole, called Intesa Vita. Alleanza's share in the new company stood at 45 percent. The new outlet, which boasted a branch network of 3,000 and more than 1,700 financial advisors, was expected to help Alleanza maintain its strong growth as it moved into its second century as Italy's leading life insurance group.
Principal Subsidiaries: Agricola San Giorgio; Alleanza Investments PLC (Ireland); Finagen; Fondi Alleanza; La Venezia Assicurazioni; Timavo Vita; Torcello.
Principal Competitors: Allianz Subalpina SpA; Fondiaria-SAI, S.p.A.; Riunione Adriatica di Sicurtà S.p.A.
- "Alleanza Assicurazioni: Moving Places," Financial Times, June 16, 1998, p. 11.
- Dickson, Bill, "Alleanza Move Stuns Investors," Financial Times, May 4, 2001, p. 44.
- Fanfani, Tommaso, Alleanza Assicurazioni: cento anni di storia, Milan: Alleanza Assicurazioni S.p.A., 1998.
Source: International Directory of Company Histories, Vol. 65. St. James Press, 2004.