Italian insurer Generali has posted a 56.7% decrease in net profit in the first half of 2020 due to disruptions in the investment markets caused by COVID-19, as well a large contribution to a pandemic emergency fund.
The group’s profit fell by to €774 million in H1 2020, compared with €1.79 billion for the same period last year.
This reflected €226 million of net impairments on investments related to the performance of the financial markets, €183 million for the arbitration settlement for the sale of BSI and a contribution of €100 million to the Extraordinary International Fund for the pandemic emergency.
The adjusted net profit, excluding the one-off expense of the Extraordinary International Fund for Covid-19, stood at € 1,032 million, or -21.2%.
Generali’s operating result, however, remained flat at €2.71 billion, compared with €2.72 billion in H1 2020.
This reflected an increase in the P&C and Asset Management businesses, supported also by recent acquisitions, and in the Holding and other businesses, which offset a decrease in the Life segment.
Additionally, the company’s combined ratio improved to 89.5% from 91.8% last year and its new business margin was 3.94%, compared with 4.40% previously.
Meanwhile, total gross written premiums reached €36.5 billion (+1.2%) thanks to the positive performance of the Life (+1.3%) and P&C (+0.9%) businesses.
“The performance in the first half of the year confirms the validity of the Group’s strategy, the solidity of its business model and Generali’s technical excellence which enabled us to face these unprecedented circumstances,” said Generali Group CEO Philippe Donnet.
“One of the Group’s key priorities was to support the communities impacted by Covid-19 through the Extraordinary International Fund and other initiatives. We also responded to this challenging moment by accelerating our innovation and digital transformation of the business and operating structure,” he continued.
“Further, we continued to execute our Generali 2021 strategy in a disciplined and effective manner while also pursuing sustainable growth. I would like to give special recognition to our people – employees, agents and partners – who guaranteed business continuity during these difficult times and who have demonstrated their commitment to being Lifetime Partner for our customers, a commitment highlighted in Generali’s first-ever global advertising campaign launched in July.”