Unipol Assicurazioni 2024 Annual Report

Introduction

Macroeconomic background and market performance

Macroeconomic background

In 2024, global GDP grew by 2.7%, marking a slight slowdown compared to +2.8% in 2023, while inflation was gradually declining in the main economies, triggering the easing of restrictive monetary policies by international central banks. The slowdown in global growth is partly linked to a weak Chinese economy. However, the achievement of the growth targets set by the Chinese government has prevented a more significant slowdown in global growth.

In 2024, United States GDP grew by 2.8%, compared to +2.9% in 2023: economic growth remained steady throughout the year, recording +0.8% in the third quarter and +0.6% in the fourth quarter (compared to the previous quarter). More specifically, GDP growth was supported by private consumption, the good performance of private investments and public expenditure. The consumption trend was supported by a still very solid labour market, with the unemployment rate confirmed at an all-time low in 2024 (on average at 4%, up slightly compared to 3.6% in 2023). Growth was also accompanied by a gradual reduction in inflation which, however, remained above the Federal Reserve’s 2% target (3% on average in 2024 compared to 4.1% in 2023).

In China, GDP grew by 5% in 2024, marking a slowdown compared to +5.4% in 2023 due to continuing difficulties in domestic demand and the decline in exports. However, the stimulus measures adopted by the government and the Central Bank encouraged an acceleration of GDP growth in the fourth quarter, which reached +1.6% over the prior quarter, and the achievement of the Chinese government’s 5% target. The labour market therefore remained robust, with an unemployment rate down slightly to 5.1% on average in 2024 (down slightly compared to 5.2% in 2023), while the annual average inflation rate remained stable at 0.2%.

In Japan, GDP is expected to close 2024 down 0.2% due to the highly negative figure for the first quarter of the year (-0.6% compared to the fourth quarter of 2023), when the Japanese economy was held back by lower consumption and investments and the decline in foreign trade. Despite the recovery in GDP in the second and third quarter, goods exports remained weak, especially to the European Union and the United States. However, the unemployment rate remained at modest levels, equal, on average, to 2.5% per year compared to 2.6% in 2023, while the inflation rate fell on average to 2.7% per year compared to 3.3% in 2023, despite the acceleration to 3.6% in December.

In 2024, Euro Area GDP grew by 0.7%, an acceleration compared to +0.5% in 2023. However, economic growth remains fragile and uneven across the major countries. In the third quarter, GDP rose by 0.4% over the previous quarter, while in the fourth quarter it was stagnant, having been supported mainly by consumption, while investments were affected by restrictive monetary conditions and foreign trade was penalised by weak demand from China. The negative manufacturing cycle mainly struck Germany and Italy, while Spain, which is more service-oriented, recorded growth rates higher than the Euro Area average. Despite the weak economic situation, the unemployment rate fell to 6.4% compared to 6.6% in 2023, while the annual average inflation rate fell to 2.4% against 5.5% in 2023, thus favouring an easing of monetary restrictions by the ECB.

In 2024, Italian GDP grew by 0.5%, marking a slowdown compared to +0.8% in 2023 due to the negative manufacturing cycle and the Euro Area slowdown. Growth was weak and declining throughout the entire year, from +0.4% in the first quarter and +0.2% in the second quarter (quarter-on-quarter) to stagnation in the third and fourth quarter. Growth was penalised above all by weak private investments, which were affected by restrictive financial conditions and lower tax incentives (including the building superbonus). Despite the deceleration in trade with Germany and the slowdown in growth in China, net exports made a positive contribution to Italian GDP growth. The annual average inflation rate fell to 1.1% from 6% in 2023, thanks for the most part to lower energy inflation. The labour market remained solid despite weak economic growth, with an annual average unemployment rate down to 6.5% compared to 7.7% in 2023.

Unipol Assicurazioni 2024 Annual Report

Financial markets

In 2024, the Fed cut the Fed funds rate by 100 basis points and further reduced the volumes of the portfolio of securities purchased during the various quantitative easing programmes. The ECB also interrupted its monetary restriction phase, also reducing the deposit rate by 100 basis points which, in the new monetary policy framework adopted in the course of 2024, became the official policy rate. Starting in September 2024, as part of the new framework, with the aim of maintaining satisfactory liquidity conditions on the money and interbank markets, the ECB simultaneously narrowed the monetary policy corridor from 50 to 15 basis points, cutting the rate refi to 3.15% (-135 basis points). Lastly, in 2024, the ECB continued to reduce the amount of securities held in the portfolio for monetary policy purposes, not renewing maturing securities purchased under the Asset Purchase Programme and reducing the portfolio of securities purchased during the pandemic (as part of the Pandemic Emergency Purchase Programme) at the average rate of €7.5bn per month.

As a result of the ECB’s rate cut, the 3-month Euribor rate closed 2024 down to 2.71%, roughly 120 basis points lower than at the end of 2023, while the 10-year swap rate reduced over the same period by about 12 basis points, closing 2024 at 2.37%.

In Germany, the 10-year Bund closed 2024 at 2.38%, up by around 35 basis points on the values at the end of 2023, whilst in Italy the 10-year BTP closed 2024 at 3.53%, down 15 basis points. The 10-year spread between Italian and German rates was therefore 115 basis points at the end of 2024, down 51 basis points from its value at the end of 2023.

2024 ended favourably for international stock markets. In Europe, the Eurostoxx 50 index, which refers to the Euro Area indexes, showed an increase of 8.3% in 2024 compared to the end of 2023. The FTSE Mib index, referring to Italian listed companies, recorded an increase of 12.6% during the same period, while the DAX index, referring to German listed companies, closed 2024 up by 18.8% compared to December 2023.

In the United States, the S&P 500 index instead closed 2024 ahead by 23.3% compared to the values at the end of 2023. International stock markets also closed 2024 with significant gains: the Nikkei stock index, referring to listed companies in Japan, closed 2024 with growth of 19.2% compared to December 2023, while the Morgan Stanley Emerging Markets index (MSCI EM), referring to emerging markets, recorded a more limited increase at 31 December 2024 of 5.1% compared to December 2023.

The expansion of interest rate spreads between the United States and the Euro Area favoured a 6% appreciation of the US dollar against the euro, with the euro/dollar exchange rate closing 2024 at 1.04 dollars to the euro compared to 1.10 at the end of 2023.

Insurance Sector

The final figures for the third quarter of 2024 show premiums in the Italian and non-EU direct business insurance market of approximately €109.3bn, up 16.4% compared to the third quarter of 2023. We therefore estimate that 2024 will close with a substantial increase compared to the previous year, i.e. with premiums close to €149bn (+16% compared to 2023).

In the third quarter of 2024, total Italian and non-EU direct business Non-Life premiums written increased by 7.7% compared to the same quarter of 2023 and therefore year-end growth of 7.3% is expected, with premiums exceeding €40bn.

ANIA surveys for the third quarter of 2024 show total premiums of the classes MV TPL, Marine Vessels TPL and Land Vehicle Hulls up by 8.8% compared to the same period of the previous year, driven by the positive premium trend in MV TPL (+6.8%) and the positive trend of Land Vehicle Hulls (+15.2%). The increase in MV TPL premiums was favoured by higher average MV TPL premiums, which were up by approximately 7% compared to the same quarter of 2023 (standing at €416 compared to €389 last year, according to the IPER surveys published by IVASS referring to the third quarter of 2024). The increase in the average premium is also confirmed by the ISTAT list values, which increased by 7.2% in December compared to the same month in 2023. We estimate that total MV segment volumes at the end of 2024 will be up by around 8.3% compared to 2023.

Unipol Assicurazioni 2024 Annual Report

With regard to the Non-Life Non-MV business, in the third quarter of 2024 premiums in the segment were up 6.8% to €16bn, driven by the increase in premiums for Health (+11.7%) and Property (+8.5%) cover. The volumes of other Non-Life Non-MV business were up by approximately 4.8%, compared to the third quarter of 2023, thanks in particular to the positive contribution of the Pecuniary Losses (+13.8%) and Assistance (+9.8%) classes. Positive performance is expected be confirmed at the end of 2024 as well, with Non-MV premiums estimated at around €23bn, up by around 6.6%, driven by Health (+10.8%) and Property (+8.5%). Volumes of the Other Non-Life classes are expected to see growth of approximately 6.9% at the end of 2024, driven by Assistance and Pecuniary Losses.

In the third quarter of 2024, data relating to the distribution channels of Italian and non-EU direct business show an increase in premiums across all distribution channels in the MV sector. The agency channel recorded growth of 8.9% compared to the third quarter of 2023, with a substantially stable share at 83.3%. For the Direct channel, premiums were up 4.4%, with a share down by 0.3 percentage points (from 8.5% to 8.2%). The banking channel recorded an increase of 25.4% compared to the third quarter of the previous year and an overall share of approximately 4.5% (+0.6 percentage points compared to 3.9% in the third quarter of 2023). In the third quarter of 2024, in the Non-MV segment, all channels experienced premium growth except for the Direct channel, with the most significant increase achieved by the banking channel (+11.7%), with a share of 15%, up from 13.9% in the third quarter of the previous year. The agents channel recorded a market share of 63.8%, down by around 0.2 percentage points compared to the same quarter of the previous year, against a 6.5% increase in premiums.

At the end of 2024, Life premiums amounted to approximately €110bn, up 21% compared to 2023, with an increase in Class III and Class I premiums of 59.5% and 11.0%, respectively. For 2024, Class IV and V premiums were also up, by +16.8% and +46%, respectively, while Class VI premiums were down slightly (-1.9% compared to 2023). Overall, premiums written in these classes amounted to approximately €5.6bn.

In 2024, Italian and non-EU Life premiums in the direct business remained biased towards the banking channel, with a share of 56.4% of the total and down slightly (-1.1 percentage points) compared to 2023. The advisors channel share increased from 13.6% in 2023 to 16.9% in 2024, while the agents channel share decreased (from 15.3% to 13.7%). The shares of the Direct channel (11.3%) and the Broker channel (1.7%) remained basically stable.

Pension funds

In 2024, on the basis of Assogestioni data, net deposits of assets under management (mutual funds, individual asset management, collective and individual pension plans) amounted to €30.1bn, of which €14.1bn referring to collective management (open and closed funds) and €15.9bn in net deposits for portfolio management.

The management of pension assets, with net deposits of roughly €2.5bn in the third quarter of 2024, was down compared to the €4bn of net deposits recorded in the same quarter of the previous year. Asset management referring to pension funds (pension funds and individual pension plans) amounted to €122.3bn at the end of the third quarter of 2024, equal to 5% of total assets under management.

In 2024, existing positions with supplementary pension schemes, reported by Covip, increased by 447 thousand units compared to the end of 2023. The 4.2% increase recorded at the end of 2024 confirms the growth trend of recent years. In December 2024, there were therefore 11.1m existing positions, of which 8.3m held by employees (74.4%).

In line with the sector trend, in December 2024 occupational funds recorded growth of 5.7% compared to December 2023 (up by 227k positions), for a total of 4.2m positions at the end of the year, and an 8.8% increase in contributions. The main growth driver was the contribution of contractual enrolments, particularly in the construction sector fund (for about 85k positions), joined with the payment of a modest contribution from the employer, and, in the public sector, the activation of automatic registration for new public employees (for approximately 38k positions). Market pension schemes were also up compared to the end of 2023, with an increase in existing positions of open funds (+6.9%) and “new” Personal Pension Funds (PiPs) (+2.2%) and an increase in contributions of 6.8% and 4.7%, respectively. The latest data available for pre-existing pension funds, updated as at December 2024, showed an increase in the number of positions of 0.4% compared to December 2023 (around 3k more).

Unipol Assicurazioni 2024 Annual Report

In December 2024, the resources allocated to supplementary pension benefits were up by 8.2% compared to December 2023 (approximately €243bn compared to €224bn recorded in December 2023), due to increases in the prices of assets listed in the financial markets, particularly for portfolios with higher equity exposure, and the overall increase in contributions. The net return over a 10-year horizon was 2.2% for occupational funds, 2.4% for open funds, 2.9% for “new” unit-linked PiPs and 1.6% as regards the segregated fund component of “new” PiPs. All returns with a 10-year horizon were in line with or slightly higher than the revaluation threshold of post-employment benefits, equal to approximately 2.4%.

Real Estate market

In 2024, the removal of government building incentives and the possibility of transferring the accrued tax credit led to a sharp decline in investments in family residences (-2.3%). However, the improvement in credit access conditions, with the average mortgage rate falling to 3.4% at the end of 2024 from 4.4% at the end of 2023, stimulated home sales in the second half of the year, so overall in 2024 sales fell by 1.8%, returning to late 2023 levels in the second half of the year. The 4.7% drop in sales in Milan was surprisingly negative, due to a market with low accessibility and the negative effects for new homes of regulatory deadlock on urban revitalisation work, after the postponement to June of the “Save Milan” Decree Law.

However, during 2024, house price trends were supported both by a decline in the supply of real estate, which was accompanied by low demand, and a rapid improvement in the expectations of real estate agents for the next two years. In fact, in 2024, there was a further reduction in the average discount requested up to 7.8% in the third quarter (from 8.6% at the end of 2023) and a resulting increase in house prices which, on average in the 13 major cities, came to 1.7% for existing homes and 2.2% for new ones. Moreover, thanks to the rapid moderation of inflation, in 2024 there was a property revaluation in real terms of about 0.4%. The price increase spread to all 13 major cities. However, in contrast to other urban centres, the Milan market (+2.1% on average per year) recorded a sharp slowdown in the existing home price growth rate (+0.3% on the second half of 2023), making it one of the least attractive markets.

In 2024, the number of leased residences remained at 2023 levels because, while the number of long-term leases decreased (-1.9% with contracts of more than 3 years), both leases with contracts between 1 and 3 years (+2.4%) and, above all, leases for student housing (+18.6%), grew. However, the supply of properties remains scarce, with only 8% of properties not used as first homes actually leased, so the high demand for leases continues to exert pressure on rents. In fact, in 2024 the rents of existing homes grew, on average in the 13 major cities, by 4.4% (with rates ranging from 6.1% in Bologna to 3.3% in Genoa and Palermo), leading to an increase in cap rates to 5.4%. The high total returns (sum of prices and cap rates), of 7.1% for existing homes (up from 6.6% in 2023), therefore make the residential market particularly attractive.

In 2024, in contrast to investments in residences, investments in buildings of companies grew by 9.6% thanks to the acceleration in the implementation of the NRRP, and drove growth in non-residential sales of 3.1%. While sales in the production segment rose by 8.1% and those of stores by 4.3%, office sales were down once again (-2.0%). Corporate investments also grew, which, after a sharp decline in 2023, returned to 2022 levels (approximately €9.6bn) in 2024, thanks to expansion in the commercial and office sectors. Non-residential market expansion therefore allowed prices to rise in 2024, to a greater extent for stores (+0.8%) and to a more modest extent for offices (+0.2%). Furthermore, thanks to higher growth in rents (+1.3% for offices and +1.6% for stores), both cap rates (5.3% for offices and 7.4% for stores) and total yields (5.5% for offices and 8.2% for stores) rose.

Unipol Assicurazioni 2024 Annual Report

Main regulatory developments

In 2024, the regulatory framework in which the Group carries on business saw significant innovations.

Relevant regulations for the insurance sector

With regard to European legislation, on 27 November 2024, Directive (EU) 2025/2, amending Directive 2009/138/EC (Solvency II), and Directive (EU) 2025/1, establishing a framework for the recovery and resolution of insurance and reinsurance undertakings (IRRD), were approved by the co-legislators. Both Directives were published in the Official Journal of the European Union (OJEU) on 8 January 2025 and will be applicable as of 30 January 2027, after being transposed into domestic law. The Solvency II Review Directive establishes important changes, including the introduction of new triggers for the activation of the national component of the Volatility Adjustment (VA), which should ensure a more gradual and continuous financial volatility mitigation process at domestic level. With respect to the Risk Margin, a reduction in the Cost of Capital from 6% to 4.75% is expected, which, according to the Commission, should release up to €50bn at European level in terms of lower capital absorption.

The IRRD establishes a recovery and resolution framework for insurance and reinsurance undertakings, adopting the structure of the regulations applicable to the banking sector (BRRD), without however introducing additional capital requirements. The IRRD requires the main insurance undertakings to prepare and update a “Pre-emptive recovery plan”, subject to review by the Supervisory Authorities. On the other hand, the newly established resolution Authorities are obliged to prepare a “Resolution plan” containing an ex-ante assessment of the possibility of resolution of the individual insurance undertakings without extraordinary public financial support (resolvability). In addition, the Resolution Authorities are granted the power to ask the companies to put in place structural arrangements aimed at eliminating impediments to resolvability, even in the absence of stress on solvency, and numerous powers in the resolution phase, including that of writing down insurance liabilities (bail-in).

As concerns domestic legislation, the 2024 Budget Law (Italian Law no. 213 of 30/12/2023) introduces the obligation for all companies, except agricultural companies, to take out an insurance policy against damage to property, plant and equipment (land and buildings, plant and machinery, industrial and commercial equipment) caused by catastrophic events, such as earthquakes, floods, landslides, inundations and overflows. In addition, the 2024 Budget Law introduces the obligation for insurance companies and intermediaries to create a Life Insurance Guarantee Fund, representing “a membership body established between insurance companies and intermediaries with the aim of intervening to protect those entitled to insurance benefits with respect to participating companies”. In the event of the forced liquidation of a member company, the Fund makes payments to those entitled to insurance benefits, up to a maximum of €100k. When operating under normal circumstances, the Fund will have financial resources equivalent to at least 0.4% of the amount of Life technical provisions (determined on the basis of SII metrics) held at the end of the previous year by the participating companies.

On 18 December 2024, IVASS issued a Letter to the market on the treatment in the financial statements of contributions to the life insurance guarantee fund in which IVASS provided clarifications on how to recognise the ordinary and extraordinary contributions that participating companies are required to pay to the Fund in the 2024 separate financial statements. Specifically, IVASS specified that the balancing entry of the liabilities (or cash outflow) connected with the expected contributions must be represented in Operating expenses - Other administrative expenses to be recognised in the Life business technical account.

Following the conclusion of the Life Insurance Guarantee Fund establishment process, during the initial months of 2025 the participants paid the contribution due to the fund for the year 2024, equal, with reference to insurance companies, to 0.4 per mille of the amount of the Life technical provisions at 31 December 2023.

The 2023 Annual Market and Competition Law (Italian Law no. 193 of 16/12/2024) introduces a prohibition against insurance companies including clauses in MV TPL contracts that limit the policyholder’s right to uninstall black boxes free of charge at the annual contract expiry date. In addition, policyholders are recognised the right to black box data portability, although the appropriate methods for exchanging electronic data between insurance companies and common technological standards remain to be identified. Lastly, the creation of a new ANIA database is planned to improve the prevention and combating of insurance fraud in non-mandatory insurance relationships.

Unipol Assicurazioni 2024 Annual Report

With regard to secondary legislation, on 27 March 2024 IVASS published a Letter to the market containing supervisory expectations on insurance product oversight and governance (“POG”), to encourage the accurate and uniform application of the European and national regulatory framework. The letter to the market outlines IVASS’s supervisory expectations in terms of POG and Value for Money (V4M) with particular reference to the assessment of product value for the customer arising from the testing phase (profit test) for insurance-based investment products (IBIPs). IVASS complies with EIOPA guidelines on V4M assessment and addresses them in greater detail, taking into account evidence acquired through inspections and investigations. IVASS expects a strengthening of the POG policies by insurance companies, an increase in the granular identification of the reference market and allocation of a greater weight to product profitability for the customer in the product evaluation and testing phase. In addition, on 28 March 2024, IVASS published consultation document no. 2/2024 containing a Draft Regulation laying down provisions on linked contracts, proposing more flexible asset allocation rules than those set forth in ISVAP Circular no. 474/2002 and provisions aimed at enhancing the demographic guarantee component and limiting costs, so as to further increase the linked product V4M.

It should be noted that on 12 March 2024, IVASS issued Measure 143/2024 which amended IVASS Regulation no. 52 of 30 August 2022 containing the implementation methods regarding the right to value trading securities based on the book value in the financial statements of the previous year rather than the realisable value (if lower than the purchase cost). The allocation of an undistributable profit reserve was also required in an amount corresponding to the difference between the values recorded and the market values recorded at the end of the reference period, net of the related tax charge. This option, introduced by Italian Decree Law no. 73 of 21 June 2022, was also extended to the entire 2024 financial year by MEF decree of 27 September 2024. Unipol did not make use of the option provided by the above-mentioned Regulation.

On 26 November 2024, IVASS Measure no. 151 was published, amending Reg. no. 38/2011 on segregated funds in order to govern the use of the profits provision for ongoing contracts. The profits provision, introduced by IVASS Measure no. 68/2018, is a mathematical provision that makes it possible to set aside the net capital gains deriving from the sale of securities in segregated funds, to be allocated to insurance benefits established in insurance contracts within eight years, in order to stabilise the returns of segregated funds. Initially applicable only to new contracts, IVASS Measure no. 151 of 26 November 2024 extends the possibility of using profits provision to existing contracts as well, provided that the segregated fund is open to new subscriptions and that the only change to the segregated fund regulation concerns the determination of the average rate of return due to the introduction of the profits provision. Acceptance of the amendment to the segregated fund regulation is optional, without costs, and may also take place via digital means, with the possibility for the company to establish a minimum share of subscriptions to activate it.

Tax regulations

In 2024, the following regulatory measures were issued:

•

In implementation of Italian Law no. 111 of 9 August 2023 containing the “Delegation of powers to the government

for tax reform”, the provisions of greatest interest concern:

-new tax assessment rules (Italian Legislative Decree no. 13 of 12/02/2024);

-the revision of the tax penalty system (Italian Legislative Decree no. 87 of 14/06/2024);

-the streamlining of registration tax, and other indirect taxes other than VAT (Italian Legislative Decree no. 139 of 18/09/2024);

-the revision of the IRPEF and IRES tax system (Italian Legislative Decree no. 192 of 13/12/2024).

•

Italian Decree Law no. 19 of 2 March 2024 converted by Law no. 56 of 29 April 2024 containing “Additional urgent

provisions for the implementation of the National Recovery and Resilience Plan (NRRP)”. Among the provisions of interest is the new “Transition Plan 5.0” aimed at supporting investments in digitalisation and the green transition of companies.

•

Italian Decree Law no. 39 of 29 March 2024 converted by Law no. 67 of 23 May 2024 containing “Urgent measures

on tax subsidies”. The provisions of interest include:

-adjustments to regulations on the use of tax credits for building bonuses, particularly with reference to the exclusion of use for offsetting against the payment of social security and welfare contributions as of 2025;

Unipol Assicurazioni 2024 Annual Report

-the new limit on the offsetting of tax credits for building bonuses in the presence of past due taxes in the tax register for amounts exceeding €10k;

-amendments to the prohibition against offsetting tax credits of any nature in the presence of past due taxes in the tax register exceeding €100k in force as of 1 July 2024;

-the anti-usury rule for qualified purchasers of tax credits from building bonuses.

•

Italian Decree Law no. 113 of 9 August 2024 converted by Law no. 143 of 7 October 2024 containing “Urgent tax

measures, extensions of regulatory terms and economic interventions” (“Omnibus Decree”).

•

Italian Decree Law no. 131 of 16 September 2024 converted by Law no. 166 of 14 November 2024 containing “Urgent

provisions for the fulfilment of obligations deriving from European Union acts and infringement and pre-infringement procedures pending against the Italian State.” The provisions of interest include the regulatory change for loans and secondments of personnel agreed upon or renewed as of 1 January 2025, which become subject to VAT at the standard rate, as they qualify as the provision of services.

•

Italian Law no. 207 of 30 December 2024 containing “State budget for 2025 and long-term budget for the 2025-2027

three-year period” (Budget Law 2025). The provisions of interest, in force from 2025, include:

-several changes regarding IRPEF, including: the confirmation under ordinary circumstances of the three IRPEF rates, broken down by brackets, already applied in 2024; the introduction of a new exempt bonus and an additional deduction for medium-low income earners; the review of some fringe benefits, including vehicles provided for mixed use, and deductions for household dependents; the increase in the annual exemption limit of payments in kind to employees for the years 2025, 2026 and 2027; the obligation to track business travel expenses; the confirmation of the 5% rate for the taxation of subsidised productivity bonuses disbursed in 2025, 2026 and 2027; the reduction of deductions due for income exceeding €75k, including those relating to insurance premiums for all contracts entered into as of 1 January 2025; the extension to dependent family members of premiums for LTC and Dread Disease policies paid by the employer, which do not constitute income for the employee.

-the deferral, for IRES and IRAP purposes, to subsequent tax periods of deductible portions relating to write-downs and losses on receivables and goodwill. The deferral of the deduction of these items mainly affects credit and financial institutions and insurance companies.

-the extension for the next three years of the 20% increase in the deduction relating to the cost of labour deriving from new hires of permanent employees. The deduction can reach up to 130% in the case of the stable recruitment of specific categories of parties.

-the mini-IRES with a reduction in the IRES rate from 24% to 20% for companies that reinvest 80% of profits, of which at least 30% for investments in assets 4.0 and 5.0, and which hire 1% more workers.

-the reduction of tax deductions for expenses incurred from 1 January 2025 for the recovery of the building stock and energy renovation initiatives.

-limitations for access to the superbonus (subject to the submission of the authorisation to execute the works and begin works by 15/10/2024) and reduction of deduction rates (limited to 65% for expenses incurred in 2025).

With reference to the insurance sector, the 2025 Budget Law amended the payment system of stamp duty on financial communications relating to life insurance contracts with class III and V financial content, which must be carried out annually and no longer, on a cumulative basis, at the contract expiry or redemption. These annual payments will be recovered, without interest, by the companies on the benefits due to policyholders/beneficiaries at the time of contract expiry or redemption, thus generating an implicit charge for these companies against the time mismatch between the payment of tax and its recovery. The 2025 Budget Law also established an anticipation mechanism for the company also for the tax accrued for contracts in place at the end of 2024, with payments staggered over the years 2025 (50%), 2026 (20%), 2027 (20%) and 2028 (10%).

•

In implementation of Italian Legislative Decree no. 209 of 27 December 2023, on international taxation, which

introduced the Global Minimum Tax regime in Italy as of 1 January 2024, the following implementing decrees were issued in 2024 to specifically govern the various aspects of supplementary taxation:

-Italian Ministerial Decree of 20 May 2024, containing the implementing provisions of the simplified

transitional regimes: the “transitional safe harbours”, or optional temporary regimes that have been established in order to limit administrative and compliance expenses for both Large Groups and the Tax Authorities;

Unipol Assicurazioni 2024 Annual Report

-Italian Ministerial Decree of 1 July 2024 containing the methods for the implementation of the Qualified

Domestic Minimum Top-Up Tax (QDMTT). The tax, which is applied on a priority basis with respect to the Income Inclusion Rule (IIR) minimum top-up tax and the Undertaxed Profits Rule (UTPR) minimum top-up tax, is aimed at Italian companies belonging to large groups (multinational and domestic), subject to global minimum tax rules, which in Italy are subject to effective taxation of less than 15%;

-Italian Ministerial Decree of 11 October 2024, which governs the methods for determining the net income

considered for the purposes of determining the global minimum tax, providing for reductions of this net income, determined in each jurisdiction, based on the “substantial economic activities” carried out in those jurisdictions. The reductions for substantial economic activities are calculated by applying specific ratios to wage expenses and property, plant and equipment, with a view to not penalising groups established in a low-tax jurisdiction with people and tangible assets;

-Italian Ministerial Decree of 20 December 2024, containing rules aimed at adapting national legislation to

OECD clarifications. It defines certain accounting standards in relation to regulations, general currency conversion rules and the blended CFC regime;

-Italian Ministerial Decree of 27 December 2024, containing transitional provisions for the definition of the

effective tax rate.

Other regulations

On 12 July 2024, Regulation (EU) 2024/1689 on artificial intelligence (AI Act) was published in the OJEU, which: (i) prohibits certain AI systems that pose “unacceptable” risks (e.g. manipulative AI); (ii) establishes a series of requirements, including the obligation to obtain a compliance certification, for AI systems identified as “high risk”; (iii) establishes disclosure obligations with respect to “low-risk” AI systems that interact with people (such as chatbots). In the final text, the “AI systems intended to be used for risk assessment and pricing in relation to natural persons for health and life insurance” were classified as high-risk AI systems. Therefore, insurance companies that develop and place these systems on the market are subject to the numerous requirements for high-risk systems. On the other hand, insurance companies that simply use these AI systems, developed and/or sold by third parties, are qualified as users (deployers) and, therefore, are subject to fewer obligations. The majority of the provisions of the AI Act are applicable as of 2 August 2026.

Finally, Regulation (EU) 2023/2631 on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds (“EU GBS Regulation”), published in the OJEU of 23 November 2023, has been applicable since 21 December 2024. The EU GBS Regulation establishes standards for bond issuers that wish to use the designation “European Green Bond” or “EuGB” to promote their debt securities, taking as a reference the voluntary standards already present on the market and used by issuers to qualify a bond as a “green bond” (in particular, the “Green Bond Principles” developed by the ICMA, which currently represent the most widely used market standard for green bond issues). The EU GBS Regulation introduces stricter rules than the ICMA standards, requiring issuers that want to use the name “EuGB” to promote their debt securities to use the resources collected in their entirety exclusively to finance environmentally sustainable projects as defined by Regulation (EU) 2020/852 (“Taxonomy”), greater transparency on income allocation methods and an external certification to be obtained which guarantees that the resources raised are actually used for environmentally sustainable investments.

In 2024, no significant changes occurred in the series of national accounting standards issued by the OIC (Italian Accounting Standards Setter).