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Generali profits up by 7.6%, with positive results across all segments

1st August 2019 - Author: Matt Sheehan

Italian insurance giant Generali has reported that its operating result grew by 7.6% to €2.7 billion during the first half of 2019, driven by positive developments across all of its business segments.

generaliOperating results improved from €2.5 billion in H1 2018, while net profit also rose 6.4% to €1.3 billion this year, up from €1.2 billion.

Generali’s life and P&C segments increased their operating results by 4.0% and 1.4%, respectively, primarily due to strong technical profitability.

This was confirmed by the combined ratio at 91.8% and the new business margin at 4.40%.

The asset management segment, meanwhile, increased its operating result by 17.4% thanks to the growth in assets under management and the consolidation of revenues of the new asset management boutiques.

The Group’s non-operating result amounted to -€588 million, reflecting a decline in financial performance due to lower realised gains, in line with Generali’s strategy of sustaining the future returns of its investments.

Generali also saw a positive contribution from its discontinued operations, including a gain of €352 million coming from the sale of Generali Leben as well as a €128 million gain from the disposal of its Belgian business.

“These results show the Group’s capacity to generate sustainable financial and industrial value for all of its stakeholders,” said Generali Group CEO Philippe Donnet.

“The first half of the year confirms the effective and disciplined implementation of the three-year strategic plan ‘Generali 2021’ in all business segments,” he continued.

“Generali today is an increasingly global insurance and asset management group, with technical excellence in the Life and P&C segments and distinctive expertise in asset management, allowing us to successfully overcome the competitive challenges of the sector to become lifetime partner to our customers.”

Generali explained that it would continue to implement the strategy outlined in its Generali 2021 plan, which aims to help the Group withstand the overall slowing of global economic growth, as well as volatilities such as Brexit, the US/China trade war, and a general decline in interest rates.

In the Life segment, the strategy will emphasise a focus on rebalancing the portfolio towards capital-light products continues.

In the P&C segment, premiums are forecast to improve in the primary geographical areas of operation of the Generali Group, while maintaining the same levels of technical excellence with a significant focus on high growth potential markets.

Lastly, in the Asset Management segment, actions will continue during 2019 to implement the strategy.

Despite the renewed pressure from rate trends, Generali confirmed its targets for the next three years, which forecast an increase in earnings per share of between 6% and 8%6 , an average RoE of more than 11.5% and a target pay-out ratio between 55% and 65%.

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