SESSION 16. A tale of two globalisations: Multinationals and transnational companies in the Italian insurance market, 1870-1980

16. A tale of two globalisations: Multinationals and transnational companies in the Italian insurance market, 1870-1980.

Giandomenico Piluso (University of Siena)


The Italian insurance market has traditionally shown a clear-cut polarisation both as to standing and size of its companies. In fact, on the one side, from the mid-19th century it represented a relatively backward market, slowly evolving as the haphazard result of slow integration processes of local and regional markets in which small- to medium-sized companies predominantly operated. Yet, on the other side, European multinationals entered the richest markets of the country, especially in the North-West, whilst two major transnational companies, Assicurazioni Generali (Trieste and Venice) and Riunione Adriatica di Sicurtà (RAS) (Trieste and Milan), successfully established their respective multinational networks both in Italy and Europe by the First World War. The former side of the story suggests a strong correlation between modest income per capita levels and underinsured markets, largely protected from competition, captured by less efficient firms. The latter side suggests a tale of two forms of multinationalisation: foreign multinationals entering, or leaving, the Italian market according to a changing regulatory framework and transnational companies constituting the most dynamic component within the domestic market. Such strategies were alternately implemented throughout the two globalisations responding to market stimuli and geopolitical forces as well. In fact, geopolitical forces and backlash to globalisation played a major role in shaping strategies and capital/investment flows, not to say timing of technology transfers from more sophisticated players and markets.

The proposed session will focus on this dynamic component of the Italian insurance market relying upon first-hand research on the archives of Assicurazioni Generali and RAS and emphasising the far-reaching European network built up from the mid-19th century. Both Generali and RAS, established in Trieste in 1831 and 1838 respectively, adopted the public limited company structure and an innovative business model (all-risk insurance). Their organisational structure was peculiar because of its transnational organisational structure centred upon Trieste and Venice, the former under the Austrian Empire until 1919, for Generali and Trieste and Milan for RAS. Up to the late 1940s the multinational strategies pursued by Generali and RAS largely depended on the very specific array of human capital, network relations and core capabilities constituted by the multiethnic and -religious profile typical of Trieste as an international trading emporium. Under such circumstances, in the late 19th century emerged outstanding managers whose business competence and expertise proved to be crucial in their ascending to top positions allowing both Generali and RAS to be at the forefront of the insurance industry on a global scale, even contributing to define its technical and managerial standards. Thus, by the eve of the Great War Generali and RAS had established a string of successful subsidiaries and companies throughout Europe, critically depending on a variant of internationalism and unrestricted capital mobility as well as moderate State welfare intervention. The end of the first globalisation deeply altered and eventually disrupted the essential conditions of success of such an idiosyncratic organizational model and ownership structure, whilst these companies had to face mounting nationalism, restricting regulation and State intervention in welfare provision. In Italy in the 1920s such tendencies were embodied in the expansion of public expenditure and in the State-owned insurance company Istituto Nazionale delle Assicurazioni (INA), a competitor in the domestic market. In the interwar years, as the most internationalised Italian insurers, these companies had to face all the difficulties arising from financial instability and geopolitical turmoil, both at home and abroad. After the post-WWII recovery, their management resumed the long-standing multinational strategies by reorganising operational structures and business divisions of their respective networks of subsidiaries and companies in Western Europe and liquidating their interests behind the Iron Curtain. In a changing insurance market, from nuclear risks to other great risks, Generali and RAS extended their networks to American and extra-European markets emerging as relevant players within the insurance sector at least on a European scale.

The second aim of the session is proposing a reconstruction of multinational insurers operating in the Italian market in the long run, since mid-19the century. Foreign insurance companies entered the Italian market in the mid-19th century and had to cope with an increasingly restrictive regulation from the early 1920 to the 1970s. As a result their presence was relatively volatile from the early 1920s. Their relative ability to conquer and control market shares largely depended on regulation and, secondarily, market dynamics. As for the two largest Italian insurers, on the whole, the success of foreign companies depended upon regulatory intervention and geopolitical conditions. Those conditions amply oscillated over time following rhythm and direction in a way imposed by, or related to, the two globalisations.

Main objectives

The main objective of the proposed session is to provide an opportunity to present and discuss a research conducted on the archives of the major insurance companies by Giulio Mellinato, Anna Millo and Giandomenico Piluso. The session will present main its empirical results emphasizing long-term characteristics of the Italian insurance market as well as of the two major companies, Generali and RAS. The multinational trajectories of the major Italian insurers appear tightly connected to a specific genetic process stemming out from the international trading emporium of Trieste and its as much specific multi-ethnic networks that proved to be pivotal in assuring an adequate social and human capital, outward-looking strategies and technical competencies. The international conference in Seville will provide the right context in order to favour comparisons and attract potential participants, both from Italy and from main countries in which operated Italian companies and from which came foreign multinationals operating in Italy. It is expected also to offer a stimulating discussion and precise criticisms that will contribute to give a convenient shape to a publication proposal to be submitted to an international publisher or journal.

The insurance business history – and insurance history in general – is a rather overlooked field of studies in Italy and the Conference may represent an important opportunity to stimulate and gather scholars fostering future research on the evolution of the insurance industry in the Peninsula by adopting a broader and comparative approach.


Paper 1

Risk management, social security and catastrophic events in Italy between State and private insurance companies: a long-term analysis.

Giorgio Cingolani (Università Politecnica delle Marche)

From whatever point one chooses to begin, it would be difficult to contest the existence of a gap in the development of private insurance between Italy and other Western European countries. All statistics, whether comparing the per capita premiums (the so-called insurance density), or considering the ratio between premiums and GDP (the so-called insurance penetration), reveal the distance, in the life business, as in the non-life sectors, from the Unification of Italy to the present day. In the last years (2009), in the life branch Italy has approached Germany and has exceeded it in the premium/GDP ratio; but analyzing the composition of the Italian life portfolio, we realize that the great mass of life premiums are investment tools, while the portion of the life insurance business to cover death or pension risks remains residual.

In Italy, unlike the main European countries, private insurance companies have had, and still have, a marginal role in three areas: social security, health and catastrophic risks (earthquakes and floods). The essay analyzes in a historical perspective who, how and why in Italy has guaranteed many risks, which in other countries are the prerogative of private insurance companies. It is an analysis that embraces the evolutionary genesis of Italian welfare, with the aim of also offering an unprecedented point of view, to understand the trajectory, the specifics and the points of arrival of the social state that has been structured in Italy.

Finally, the essay examines the history of catastrophe risks and damages in Italy, especially earthquakes, explaining that in Italy there is no appropriate legislative framework for the compensation of catastrophic damages that is combined with a tradition of ex-post interventions carried out by the State, characterized by inefficiencies, delays and high costs for the community, the latter due to a system often bent to other purposes. The failure, or residual, participation of private insurance companies to guarantee catastrophe risks is justified by the reluctance of the policy to give up a useful tool in the search for consent. But not all risks have been covered by the state or by other parties. An interesting target of historical research concerns the exploration of the reasons why in Italy a great mass of risks has remained without coverage and, if anything, to evaluate its economic consequences. To delve into this analysis it is necessary to consider the meaning of the concept of risk and its perception within Italian society.


Paper 2

The Italian insurance industry facing globalizing markets, 1970s-2000s.

Carlo Brambilla (Università dell’Insubria)
Fabio Lavista (Università dell’Insubria)
Raffaello Seri
 (Università dell’Insubria)

From the 1980s the architecture of the Italian insurance industry underwent a process of reform aimed at introducing higher degrees of competition among companies and at enhancing their efficiency, in order to enable it to comply with the European integration process and to face the new challenges of rapidly globalizing markets. While in the 1980s regulation slowly adapted to European rules and to a more liberalized contest, from the 1990s privatizations, liberalizations, and higher competition fueled concentration in the insurance industry. The paper studies these transformations using a dataset gathering balance sheet and loss-and-profit data, at firm level, for a wide number of insurance companies, covering almost the entire system in terms of gross premium income, between 1979 and 2010. The analysis is based on nonparametric estimation of the technology set through the DEA (Data Envelopment Analysis) and tries to determine the effects of new regulatory and institutional frameworks as well as M&As on the efficiency of companies and the insurance industry as a whole.


Paper 3

Assicurazioni Generali: from the company’s origins to the First World War (1831-1914).

Anna Millo (Università di Bari)

Of particular interest is the method used for the foundation of Assicurazioni Generali. In December 1831 for the first time in Trieste, an international port with a long tradition in maritime insurance, a new company was launched with an innovative company model (public limited company) and business model (all-risk insurance) which were reflected in the articles of association and company bodies. The management structure was also peculiar in the fact of its division between Trieste and Venice, at the time both under the Austrian Empire.

In the early part of its history the company held to the principle of identity between ownership and control. This, however, did not prevent the emergence of figures such as Masino Levi (from the 1840s to the 1880s) and Marco Bessi (from 1890s to the early 20th century), who had no direct links to the owners but were able to work with them to influence strategic policy, which included expansion into distant markets, the increase of company business, company consolidation and the enhancement of its business reputation.

Worthy of particular attention is the composition of the company capital, which remained mostly in the hands of the founders and their descendants by virtue of their capacity to self-finance the capital increases they deemed necessary. The founding group were characterised by a multi-ethnic and -religious profile and the family networks typical of Trieste’s role as an international trading emporium. The passing of time saw the emergence of figures whose competence and practical business expertise allowed them to rise to managerial positions wholly in keeping with more modern technical-managerial standards.

The last part of this research records the tension arising in the early 20th century in the company management between the Trieste-based majority and the minority in the Veneto and Venice. Having developed its external entrepreneurial role in banking and the Italian hydro-electrical industry but failing to take over the company, the Venetian faction was no longer content with its minority position in the leadership. It thus advocated a severing of the ties between Trieste and Venice by means of a detachment of the Italian portfolio and the establishment in Venice of an independent company under Italian law. Proposed more than once, the plan was not put into effect because of the imminent world war.


Paper 4

The Generali Group in the interwar years.

Giulio Mellinato (University di Milano-Bicocca)

During the decades between the two world wars, Assicurazioni Generali faced a continuous change in their operational horizon. The identity of the Company and its operational structure were adapted several times to more and more challenging circumstances.

After the First World War, the fragmentation of the Habsburg Empire in some smaller and poorer national entities led to the re-adaptation of the scheme conceived by Marco Besso, centered on a relatively weak collaboration between different national satellite companies. The following President, Edgardo Morpurgo, transformed the management structure in a more international sense, creating more formally defined links and networks inside an increasingly connected structure. Finally, shortly before the Second World War, Giuseppe Volpi began the construction of a new organization, more transnational, that would keep the Company relatively safe during the conflict, and allow the Generali to adapt and to survive the extreme consequences of a hard war during the first years, and a very harsh defeat for Italy afterwards.

In the meantime, some new products were introduced, and some new markets were exploited, confirming the proactive attitude that signed the entire history of the Generali group.


Paper 5

Giuseppe Volpi at the helm of the Assicurazioni Generali: between continuity and change of strategy (1938-1943).

Luciano Segreto (Università di Firenze)

The paper is dealing with a period where companies – and not only the insurance companies – a are facing the highest risk. Actually, it will consider a quite short, but very important – and dramatic – phase of the history of the Assicurazioni Generali, the years between 1938 and 1943. The starting date is dealing with the introduction of the racial laws in Italy, and the subsequent reorganization of the management of all the companies where Italian Jews had a position. In particular, all the top management of the Generali, starting with the chairman, Edgardo Morpurgo – the man who contributed to consolidate the company into one of the leading insurance companies in the world, had to leave their position. The government appointed Giuseppe Volpi di Misurata, an entrepreneur of the electric and tourism sector, who had been in the 1920s the governor of Libya and later the ministry of Finance, and in the 1930s the inventor of the first international film festival, in Venice. Backed by the Mussolini, with a charismatic and strong personality who gave him large autonomy also from the government, Volpi did not have any previous direct managerial experience in the sector, although he had been a member of the board of directors of the company since 1915.

The paper will analyse to what extent Volpi continued the previous strategy and in which direction he changed it, both in the domestic aspects and the international network. The paper will also stress the difficult relations with the German allies and competitors, especially during the war and particularly in all the Central-Eastern European countries, where Generali had a strong influence since many decades.

The ending date, 1943, is when Volpi was de facto removed from his position. Since the end of July Mussolini was not any more the Italian prime minister, while the German troops, controlled a large portion of the country. Volpi officially step down in late October 1943, when he was under arrest in a clinic in Rome, after the SS put him in jail in late September, most probably as a revenge of Mussolini, who considered him a member of the business community and the political elites of the regime at the origin of his removal.

The paper is largely based on the private papers of Giuseppe Volpi, held in Venice by the family, and the historical archives of the Assicurazioni Generali in Triest.


Paper 6

Re-building an international network after WWII. Assicurazioni Generali as a multinational, 1946-1971.

Giandomenico Piluso (Università di Siena)

In the late 1940s Assicurazioni Generali, the major player in the Italian market, had to cope with serious difficulties, basically stemming out from the disruption of its international network due to the war and, afterwards and above all, the splitting of Europe in two competing political blocs. Generali was particularly affected by the loss of its subsidiaries behind the Iron Curtain as, well until the late 1930s, the company had pursued growth strategies largely on its ability to expand in Eastern Europe. An unpredictable geo-political shock altered the Central and Eastern axis of Generali as a consistent international network provoking a fall in its profitability and even functioning. As a result, in the early 1950s the company had to promptly refocus operation and investments on Western Europe, while liquidating nationalised subsidiaries behind the Iron Curtain, a forced choice that turned out to be a fire sale. From the mid-1940s, as an alternative, Generali reinforced its network in Europe, particularly in Germany and France, and tried to spot opportunities to enter the US market, according to a strategy essentially aiming to move the company’s axis from Eastern Europe to the Western area, that is Western Europe and US with some minor appendices in Asia and Africa. Generali consolidated and gradually rationalised its large European network (Germany and Austria, Belgium and France, Spain), eventually entered the US insurance market in the mid-1960s through a joint venture with Aetna Life and Casualty and reinforced its tiny presence in South America, Africa and Asia, where the American model, centred upon alliances and joint ventures, was generally embraced.

By the late 1950s, after having successfully confirmed its primacy in Italy, Generali concluded such a complex and vast reorganisation process, significantly depending on geopolitical divides (the Cold War), by adopting a hybrid organisational form. From the early 1960s Fabio Padoa, quickly progressing through the hierarchical ladder, played a pivotal role by effectively mixing the company’s traditional lax organisational principles – that of fundamentally being a large international network with relatively loose coordination mechanisms – with more state-of-the-art organisational models, typically by introducing some M-Form elements. If Padoa actively promoted major organisational and technological innovations at home (for instance, Generali built up a brand-new headquarter and bought a string of new mainframe computers to improve operational efficiency and reduce costs), abroad he redesigned strategies and organisational structures. A major factor was the emerging of new big risks, such those related to atomic power and the spreading of civil airline traffic, which imposed a wider risk sharing and distributing mechanism. Facing such market challenges, Padoa was intimately persuaded that the “natural” strategy of an insurance company should be to attain an international, or multinational, scale in order to distribute more efficiently old and new risks, otherwise hard to manage at a national level. In achieving his major results, Padoa relied on his outstanding capabilities as a manager, a perfect polyglot with a strong flair for systematic thinking about insurance risk and markets. To this regard, Padoa aimed to reproduce some re-insurance principles within the multinational network of the Generali Group (in his thought, as expressed in several essays and a book, insurance is an international business by definition as it has to share and distribute risk virtually at a world scale).

Relying upon archival sources (Generali Archives, Trieste), the paper will present and discuss main strategies and achievements pursued and obtained by Generali from the late 1940s to the early 1970s, as a multinational company, particularly by focusing on Padoa’s own network of business partners and allies within the group and the profession.