In 2018, premiums in non-automotive branches (excluding RC Auto, RC Natanti and Land Vehicle Bodies) increased by 3.5% compared to the previous year. The overall combined ratio of the 2018 budget improved compared to 2017 to 84.6%. This improvement was driven by the increase in premiums higher than the growth recorded by the burden on claims.
The premiums collected by the accident sector amounted to 3,096 million, substantially the same as the previous year. The table below highlights all the data for the last 15 years. It can easily be seen that premium growth has been virtually nil considering that, in 2004, this collection amounted to 2,887 million and after an increase of about four years it has reached 3,202 million and, since 2005, a slow decline has begun that has stopped precisely in the last two years. However, the fact remains that premiums have increased by around 7% in 15 years and, therefore, we are facing an undoubted decline, taking into account the low inflation rates. It would therefore seem, from reading these data, that we are facing a mature market. The reality, on the other hand, seems very different to us because there is a large area of individuals and families who do not have any insurance cover against accidents. If we then look at the claims charges, i.e. the costs incurred annually by insurance companies that take into account the claims of the exercise and any changes caused by the sufficiency and inadequacy of the previous years, we can see that 2018 was the year that, throughout the period taken in observation, showed the lowest burden on companies. Just to give an example, we point out that compared to 1,186 million charges in 2018, we can detect the 1,699 million in 2009! Just as we think it is appropriate to point out that claims provisions have always proved to be appropriate and in each financial year the companies have shown savings.
Speaking of percentages we can see that at the end of the last century the burden for claims was more than 60% and began to fall from the 2000s to 38.7% in 2018. Similarly, the combined ratio, which in the period above exceeded 90% only since the 2000s began to fall below this percentage and has now been in the order of 75-76%. The improvement of about 20 points, in the cost of claims, did not pay a similar percentage for the combined ratio as the expenses incurred by companies increased from about 32% to 37.3% in 2018. Most of these charges were determined by commissions (26%), to which other costs of acquiring and marketing products (5%) must be added. The other overheads amounted to 6.3%. For the combination of these cost factors, the result of the overall technical account, which at the beginning of the new millennium was in the order of 300 million euros, almost reached 700 million in 2018. The accident sector, therefore, is certainly positive and interesting for companies, but it fails to show growth in line with other countries close to us such as France, Great Britain and Germany.
After 15 years the disease is getting closer and closer to the injury branch and with every eventuality in the coming years will be seen overtaking. The pace of growth, in fact, is quite positive considering that since 2004 the increase has been 75%.
Claims also grew, but fortunately for businesses, it was lower than premiums. The increase was, in fact, just over 50%. For the disease branch, reserve provisions were also consistent despite the inadequacies that were evident from 2004 to 2010. With regard to the results of the overall technical account, it should be remembered that until 2010 the results had always been negative. In the following two years, the balance of accounts was reached and then significant profits were highlighted, although not comparable to those of the accident sector. The year 2018 appears to be down slightly, with a profit of 61 million euros and a reversal of the trend compared to the previous 4 years. Until 2010, the combined ratio was more than 100%, with the obvious consequence of generating budget losses; only since 2011 the percentage has fallen below the fateful 100 threshold until it achieves brilliant results in the three years 2014-2017. Unlike the accident sector, the expense ratio was down from the early 2000s to an overall percentage of 22.9%. However, the fact remains that the disease branch could become much more important than it is today if the heavy expenditure incurred by private individuals to supplement public services is taken into account. In fact, the so-called out-of-pocket expenditure now stands at 37 billion euros. Spending is expected to reach EUR 42 billion in 2019, with an increase due primarily to the lengthening of waiting list times. It seems, therefore, evidently that only a marginal part of the health expenditure borne by Italian citizens is "intermediated" with insurance policies. It is, however, presumable, as well as desirable, that in the face of undoubted demand from the market, offers of insurance protection can be calibrated to match the needs of users while preserving the balance of accounts on the part of companies. It is clear that balance will have to be pursued through a strong focus on costs and through the search, through appropriate conventions, for significant economies of scale.
Finally, with regard to the distribution of accident and illness products, which in the recent past were almost exclusively the legacy of agents and brokers, we can see that, while direct sales (telephone and internet) have reached a percentage of 1.4% the sale implemented by bank branches has exceeded a market share of 13% in 2018. This means that if we look at the 2008 figures we can see that sales over the Internet and telephone are close to 1.4%, while sales at bank branches do not reach 7%. With the peace of mind of those who had foreclosed evictions of the sale via the Internet and considered the one carried out by bank employees who have doubled their market share in a decade.