Generali Group

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          Strategy

          Generali is one of the world’s largest companies in the insurance and asset management sectors, with a successful history that in 2021 celebrated its 190 years. We want to strengthen our leadership in Europe and expand our presence in selected Asian markets, bringing forward our commitment to being a sustainable Lifetime Partner to our customers.

          During the Investor Day that took place on 15 December 2021, Generali launched the Group’s new three-year strategy Lifetime Partner 24: Driving Growth.
           
          The bedrock of the new plan is our ongoing commitment to be a Lifetime Partner to our more than 68 million customers in over 50 countries. Investments in personalised products, digitally-enabled advice and a best-in-class customer experience will see Generali and its global network of 165,000 agents get even closer to customers.
           

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          “Generali’s longstanding Lifetime Partner commitment puts our customers at the heart of everything we do. Under our new plan, we will take this commitment to the next level and confirm Generali as a customer-focused and data-driven innovator.
          The ambitious targets and initiatives we have announced today are possible thanks to the successful delivery of our previous strategic plans. Today, Generali has a strong financial position, diversified earnings, consistent profitable growth and a track record of generating best-in-class shareholder returns. We look forward to building on these achievements over the next three years. Our leadership in insurance, our established in-house asset management capabilities, our digitally-enabled network of 165,000 agents and our increased commitment to making a positive social and environmental contribution mean that Generali is ideally placed to achieve sustainable growth for the benefit of all stakeholders.”

          Philippe Donnet, Generali Group CEO

           

          The strategic plan Lifetime Partner 24: Driving Growth sets out a clear vision for Generali in 2024 and is built on three strategic pillars: drive sustainable growth, enhance earnings profile, and lead innovation. The plan will also deliver strong earnings per share growth, increased cash generation and a higher dividend.
           
          We will go further in our sustainability commitments during this strategic cycle, with a continued focus on making a positive social, environmental and stakeholder impact. In addition, we will continue to invest in our people to ensure they are engaged with the successful delivery of the new plan while fostering a sustainable work environment.

          Lifetime Partner 24: Driving GrowthDRIVE SUSTAINABLE GROWTHBoost P&C revenues and maintain best-in-class technical marginsGrow capital light business, technical profits and ESG product rangeUnderpin growth with effective cost management3STRATEGICPILLARSENHANCE EARNINGS PROFILE Improve Life business profile and profitabilityRedeploy capital to profitable growth initiativesDevelop Asset Management franchise furtherLEAD INNOVATIONIncrease customer value through Lifetime Partner advisory model Accelerate innovation as a data-driven company Achieve additional operating efficiency by scaling automation and technologyDELIVER STRONG FINANCIAL PERFORMANCE, BEST-IN-CLASS CUSTOMER EXPERIENCE AND ANEVEN GREATER SOCIAL AND ENVIRONMENTAL IMPACT THANKS TO OUR EMPOWERED PEOPLE

          AMBITIOUS 2024 TARGETS BASED ON SUSTAINABLE GROWTH:

          Strong earnings growth: 6% - 8% EPS CAGR range (2021-24)
          Robust EPS growth driven by:

          • Higher growth in P&C and ongoing transformation of Life portfolio, supported by continuous expense optimization
          • Sustained revenue growth in Asset Management
          • Increased contribution from high quality technical and fee earnings
          • Effective capital redeployment


          Increased cumulative net Holding cash flow: > € 8.5 billion (2022-24)
          To be achieved through:

          • Growing recurring cash remittances underpinned by solid capital generation
          • Continued implementation of disciplined Group Capital Management Framework, enabled by resilient Solvency position


          Higher dividend: cumulative € 5.2 - 5.6 billion cash dividends (2022-24) vs € 4.5 billion (2019-21)
          To be achieved by:

          • Boosting P&C revenues and maintain best-in-class technical margins
          • Growing capital light business, technical profits and ESG product range
          • Underpinning growth with effective cost management


          KEY HIGHLIGHTS OF THE NEW STRATEGIC PLAN

          Drive sustainable growth

          • Improve market share in segments with significant growth potential – SMEs, Senior Care in Europe and Travel in the US
          • Seize growth opportunities offered by health protection gap thanks to our leadership in core markets
          • Drive Unit Linked business volumes and further internalize margins
          • Boost protection as a de-risking tool for investment solutions
          • Expand ESG solutions proposition
          • Maintain cost discipline in mature insurance markets
          • Focus investments in Asia and fee businesses


          Enhance earnings profile

          • Undertake comprehensive in-force optimization to reduce capital intensity and improve operating result
          • Enhance strategic asset allocation, integrate ESG and leverage real asset platform to improve returns
          • Reinforce leadership in Europe and strengthen presence in selected Asian markets
          • Invest in selected Asset Management capabilities and build scale to accelerate 3rd party growth
          • Expand real asset capabilities building an in-house private debt proposition to improve risk-adjusted returns and fee margin
          • Upscale distribution platform to drive organic growth in 3rdparty revenues


          Lead innovation

          • Increase customer value by scaling digitally-enabled advisory model
          • Establish seamless omni-channel approach across distribution channels
          • Gain share of European digital profit pool by scaling direct operations
          • Leverage new data capabilities to improve technical leadership and offer value-added services through digital ecosystems
          • Develop powerful and sustainable innovation engine to support future growth
          • Reduce costs through digitization, core process automation and shared platforms
          • Optimize further claims management using Artificial Intelligence

          Generali 2021: Targets delivery in an unprecedented global scenario

          FINANCIAL TARGETS 2019-2021 

          CURRENT STATUS

          6%-8%
          EPS CAGR RANGE1
          2018 – 2021

          7.6% ACHIEVED

          €4.5 - 5.0 billion
          CUMULATIVE DIVIDENDS
          2019 – 2021

          55% - 65%
          DIVIDEND PAY-OUT RANGE2



          € 4.52 bn ACHIEVED
          subject to regulatory enviroment

          >11.5%
          AVERAGE RETURN ON EQUITY3
          2019 – 2021

          12.4% 2019 ACHIEVED
          7.7% 2020 impact of COVID-19 and one-offs
          12.1% 2021 ACHIEVED

          (1) 3-year CAGR, adjusted for impact on gains and losses related to disposals and acquisitions
          (2) Adjusted for impact of gains and losses related to disposals and acquisitions
          (3) Based on IFRS Equity excluding OCI and on total net result

          Generali 2021: Industrial KPIs achieved in all strategic areas

          STRATEGIC ITEM MAIN INDUSTRIAL KPI GOAL END OF PLAN
          Profitable growth Earnings CAGR 2018-2021 insurance markets Europe 3% - 6% OVER-ACHIEVED
          Earnings CAGR 2018-2021 service-based revenue streams 7% - 10% Impact of COVID-19
          Earning CAGR 2018-2021 high potential insurance markets 20% - 25%

          ACHIEVED

          Earning CAGR 2017-2021 Asset Management >20%1

          OVER-ACHIEVED

           
          Capital management and financial optimization Cumulative Capital Generation 2019-2021 > €10.5 billion

          OVER-ACHIEVED

          Net cash remittance to Holding 2019-2021 > €7 billion

          OVER-ACHIEVED

          Debt Reduction by 2021 €1.5 - 2 billion

          ACHIEVED

          Gross Interest Expense Reduction 2021 vs. 2017 €70 - 140 million

          OVER-ACHIEVED

           
          Innovation and digital transformation Total Investments toward internal strategic initiatives 2019-2021 €1 billion

          ACHIEVED

          Cumulative expense reduction Insurance Europe 2018-2021 €300 million

          ACHIEVED

           
          People, brand and sustainability New Green and Sustainable Investments by 2021 €4.5 billion

          OVER-ACHIEVED

          Relationship NPS by 2021 Best among
          international peers

          ACHIEVED

          Reskilled employees by 2021 50%

          OVER-ACHIEVED

          Organizational entities with a smart working policy in place 100%

          ACHIEVED

          1 Including inorganic growth