Generali has reported a 40% decline in Group net profit for the first nine months of the year to approximately €1.3 billion, while gross written premiums (GWP) increased slightly, year-on-year, to roughly €52 billion.
The Group’s net profit was impacted by €310 million in net impairments on investments related to the performance of financial markets, €183 million for the arbitration settlement on the BSI disposal, alongside a contribution of €100 million for the Extraordinary International Fund for the global pandemic, and a €73 million expense from the liability management transaction.
Overall, Group GWP increased by 0.3%, with property and casualty (P&C) GWP remaining largely unchanged at €16.6 billion, and Life GWP increasing by 0.4% to €35.4 billion.
The consolidated operating result amounted to €4 billion for 9M 2020, which represents growth of 2.3% from the €3.9 billion posted a year earlier. Within the life segment, the operating result fell by almost 15% to €2 billion, although this was more than offset by growth of 18.6% to €1.8 billion in P&C. Furthermore, Generali’s Asset Management segment saw its operating result improve by more than 27%, year-on-year, to €342 million.
Within P&C, Generali notes that the higher operating result benefited from the recent acquisition of Seguradoras Unidas in Portugal, while the investment decline was a result of lower current income.
All in all, the P&C combined ratio improved by 2 percentage points to 89.7%, mostly as a result of a decrease in the non-catastrophe current year loss ratio in the motor lines across all of the company’s main countries of operations, and also owing to the impact of lockdown restrictions.
During the nine-month period, Generali has reported natural catastrophe claims of €213 million, which equates to 1.4 percentage points on the combined ratio.
Overall, Generali has reported that the Group operating result was estimated to be negatively impacted in 9M 2020 for around €125 million as a result of the COVID-19 pandemic. In the Life segment, the estimated negative impact is seen at €276 million for the period, largely driven by the lower net investment result.
The firm’s P&C operation was actually estimated to have been positively impacted to the tune of €94 million as a result of the pandemic, as higher claims directly linked to the pandemic and lower current income were more than offset by a reduced loss ratio as a result of lockdown measures.
At the same time, Generali’s operating result was estimated to be positively impacted by cost savings resulting from initiatives implemented by the Group to respond to the Covid-19 outbreak.
Generali Group’s Chief Financial Officer (CFO), Cristiano Borean, commented: “The results for the first nine months continue to demonstrate Generali’s resilience as evidenced by the excellent technical margins supporting the operating result and capital position. In an environment that continues to be characterised by heavy macroeconomic and financial impact of the ongoing pandemic, the Group confirms its strengths based on its leadership position in Europe and a primarily retail-focused, flexible and diversified business model.
“Generali remains committed to be a true Lifetime Partner to its customers, through specific aid and assistance initiatives, and to support the communities where it operates, through initiatives including the Extraordinary International Fund for Covid-19.”
