Consolidated results at 30 September 2011

11 November 2011 - 14:37 price sensitive

Generali: strong industrial performance despite worsening market crisis (*)

  • Net profit at € 825 m (€ 1.3 bn 9M10) after overall net impairment losses of € 824 m of which € 329 m related to Greek bonds. Strong growth in the Non-Life operating result (+36.4%); Life operating result (-14.1%) and non-operating result affected by impairment losses.
  • Stable operating result in the financial segment (+0.7%), thanks to positive performance of BSI and Banca Generali
  • High technical profitability in Non-Life with a 2.2 p.p. improvement in the Combined Ratio to 96.6% (98.8% 9M10). Positive progress in all the main countries where the Group operates, especially Italy, France and CEE.
  • Non-Life premiums up to € 16.9 bn (+2.3%) with increasing growth in 3Q in all business lines
  • Life premiums at € 34.4 bn (-7.7%) despite the fall in single premiums (-21.2%) as a result of Eurozone market trends. Growth in business with higher margins, driven by annual premiums (+5%). Positive Life net inflows at € 6.5 bn.

The Generali Group CEO Giovanni Perissinotto said: “Despite the difficult financial and economic environment the Group continues to demonstrate good progress in its operating performance, particularly in the Non-Life business. This performance supports the strength of our business model which is based on a diversification across markets, geographies and the Group’s wide range of distribution channels.”

Milan. At a meeting today chaired by Gabriele Galateri di Genola, the Assicurazioni Generali Board of Directors approved the consolidated results as of 30 September 2011.

In a macroeconomic context affected by an exceptional crisis in the financial markets and sovereign debt, which worsened in the third quarter, the Group closed the first nine months of the year with improved technical results in both Life and Non-Life segments. The strong growth in the Non-Life operating result and the steady performance in the financial segment allowed the Group to counterbalance the impact of the financial markets on the Life sector and maintain an overall stable operating result.

In the first nine months Net profit was € 825 million (-37.1%; € 1,313 m for 9M10), reflecting the impact of overall net impairment losses of € 824 million, of which € 329 million on Greek government securities2 and € 495 million mainly on equities, including € 143 million on Telco.

The overall operating result remained steady at € 3,100 million (-1%; € 3,133 m 9M10) with strong growth (+36.4%) in the Non-Life segment to € 1,204 million, the best performance of the last three years. The key driver behind the Non-Life result was excellent technical profitability, with a 2.2 percentage point improvement in the combined ratio to 96.6% (98.8% 9M10). The result in the Life segment was € 1,978 million (-14.1%) with good technical margins – net of expense, which showed a further improvement – whereas financial margins were affected by impairment losses, especially in the third quarter. The contribution of the financial segment was stable.

On the production front, overall gross premiums maintained the upward trend since the beginning of the year reaching € 51,327 million (-4.6%; € 53,829 m 9M10). The growth in all Non-Life business lines contributed to this result with premiums totalling € 16,942 million (+2.3%; € 16,557 m 9M10). 

In the Life segment, the Group continued to guide production towards products with larger margins and a higher return on invested capital. Premiums amounted to € 34,385 million (-7.7%) with growth in annual premiums (+5%). The quality of the Group portfolio and the effectiveness of its proprietary networks enabled it to maintain high Life net inflows of € 6.5 billion, despite the macroeconomic crisis.

The Group’s investment strategy maintained an asset allocation policy designed to consolidate current margins and reduce capital absorption. The Group continued its portfolio de-risking strategy, reducing the proportion of equities to 5.8% (7.5% at the end of 2010), and exploiting the

healthy market performance of the first half of the year. Fixed-income instruments were substantially stable, at 79.5% (80% at the end of 2010), as were real estate investments. The proportion of cash and cash equivalents rose as a result of the Group decision to work towards a prudent increase in the proportion of investments in liquidity instruments, given the current financial context characterised by severe pressure on the government securities of a number of Eurozone countries, notably Italy. Overall current profitability for the first nine months was high, at 3.2%.

Shareholders' equity was € 15,846 million (-9.4%; € 17,490 m at the end of 2010). This figure  chiefly reflects the negative impact of € 1,652 million in the reserve for net gains on available-for-sale financial assets, arising mainly due to conditions in the financial markets in the third quarter. The Solvency I ratio reached 118% (132% at the end of 2010). Should the anti-crisis decree be applied, the ratio would be 122%.


Given the financial and macroeconomic scenario described above, the Life segment is expected to record a positive net cash inflows, although at lower levels than in 2010, and characterized by a good quality in terms of technical marginality. In its underwriting activity, the Group will continue to favour, in fact, products that absorb less capital, with the aim of maintaining/improving technical margins, owing in part to the cost-containment policy.

On the contrary, the Non-Life segment is expected to confirm the growth rates of the Group's written premiums observed in the first nine months of the year owing to the performance both of the Non-Motor business and of the Motor line. If natural catastrophes will be confirmed at normal levels, overall technical margins may be expected to improve due to the maintenance of current levels of operating efficiency and the continuing effects of the tariff and claims management policies implemented by the Group.

The Group investment policy will continue to be based on a prudent asset allocation focused on consolidating current return, reducing the capital absorbed and maintaining a higher level of liquidity of the portfolios taking into account the current financial environment characterized by strong tensions on government bonds of some countries in the Euro Area and in particular on Italian bonds.

On the basis of the scenario described above, the operating result of the Non-Life segment is expected to increase, driven by the continuing effects of the underwriting policies implemented by the Group. In addition, considering the extremely volatile financial market performance, the operating result of the life segment is expected to decrease due to extraordinary components associated with the aforementioned volatility, which will have an impact also on the Group's net result.


New business in terms of APE (Annual Premium Equivalent) was € 3,535 million (-7.6%; € 3,827 m 9M10), reflecting a recovery compared with performance in the first half of the year (-9.4% in 1H10), with healthy progress in Italy (+1.8%). Overall, performance was particularly satisfactory in annual premiums (+3.6%), which account for 61.7% of APE.

The Life operating result reflected growth in the technical margin, owing to the higher proportion of annual premiums in the business mix, and the good profitability of the Health business. The investment result was a negative factor, with the impairment losses on Greek bonds and equities fuelled by the market decline in the third quarter. Expenses in the Life segment were stable.

Life operating result   
€ m 30/09/2011     30/09/2010 Δ
Technical Margin 4,558 4,478 +1.8%
Investment Result 1,308 1,735 -24.6%
Expenses -3,888 -3,911 +0.6%
Operating result 1,978   2,302 -14.1%

 Life net technical reserves, including investment contracts, rose to € 316 billion (€ 313 bn at 31.12.2010), with a positive contribution from the traditional portfolio (+2.5%).


In the Non-Life segment, the business upturn that began in the second half of 2010 gathered strength in the first nine months. Gross premiums written rose to € 16,942 million (+2.3%). Premiums were stable in Italy (+0.1%), with an increase of 2.9% in the Motor business, and improved in France (+3.4%) and Germany (+1.3%) with positive contributions from both lines of business. Premiums in Central Eastern Europe were substantially steady (+0.1%), with positive growth in the Non-Motor lines (+11,4%), especially the corporate lines, counterbalancing the downturn in the Motor line in some countries.

The segment also reported strong technical margins in all the main countries. The combined ratio made a further improvement to 96.6% (98.8% 9M10) thanks to a decrease of 2.1 percentage points in the loss ratio to 69.4% (71.5% 9M10) and the focus on costs, with an expense ratio of 27.2% (27.3% 9M10).

Combined Ratio
  30/09/2011 30/09/2010 Δ
Italy 96.8% 98.9% -2.1 p.p.
France 98.8% 100.3% -1.5 p.p.
Germany 95.6% 95.7% -0.1 p.p.
CEE 88.7% 95.2% -6.6 p.p.
Total Combined Ratio 96.6% 98.8% -2.2 p.p.

The Combined Ratio improvement drove the growth of the operating result, with an important increase in the technical result, which more than tripled from the first nine months of 2010.

Non-life operating result
€ m 30/09/2011 30/09/2010 Δ
Technical Result 492 153 +221.6%
Investment Result 848 893 -5.1%
Other -136 -164 +16.4%
Operating Result 1,204 882 +36.4%


The operating result in financial services was € 279 million (€ 277 m 9M10), supported by the healthy performance of the BSI Group with its development plans in Asia, which showed an 8.5% improvement in its operating result.

Progress was reported in the net result on financial management – defined as the intermediation margin net of operating measurement losses on financial instruments – thanks in particular to the increase in the intermediation margin (the sum of net commissions, net interest income and other financial components). Since the current situation on the financial markets caused a reduction in realised gains, growth was attributable to the increase in dividends and net interest income, which benefited from the rise in market rates.

At 30 September 2011 assets managed by banks and asset managers were down, to € 426 billion, a decrease due largely to the decline on the financial markets, with third-party assets under management standing at € 90.3 billion (-0.4% on a like-for-like basis compared with 31 December 2010).

Il Dirigente Preposto alla redazione dei documenti contabili societari, Raffaele Agrusti, dichiara ai sensi del comma 2 dell’articolo 154 bis del Testo Unico della Finanza che l’informativa contabile contenuta nel presente comunicato corrisponde alle risultanze documentali, ai libri ed alle scritture contabili.


Il Consiglio di Amministrazione ha deliberato, in ottemperanza alle prescrizioni dettate dal  Regolamento ISVAP n. 39/2011, di modificare l’art. 19 dello Statuto sociale attribuendo alla competenza esclusiva dell’assemblea ordinaria l’approvazione delle politiche di remunerazione a favore degli organi sociali e del personale della Compagnia.

(*) Salvo dove espressamente indicato, le variazioni si riferiscono ai 9 mesi 2010 e sono calcolate a termini storici
(**) Titoli di Debito Greci: La crisi del debito sovrano di alcuni Paesi ha richiesto, nel caso della Grecia, un ulteriore piano di ristrutturazione del debito. Il Gruppo aveva infatti già svalutato al semestre i titoli di stato ellenici con scadenza entro il 2020, che rappresentano più del 70% della sua esposizione verso questo Paese e che originariamente erano stati individuati come gli unici rientranti nel piano di ristrutturazione. A seguito del nuovo piano di salvataggio discusso a livello comunitario a fine ottobre, il Gruppo ha svalutato anche i titoli con scadenza oltre il 2020. Infine, i titoli con scadenza anteriore al 2020 già oggetto di svalutazione al 30 giugno, sono stati ulteriormente svalutati con riferimento ai valori di mercato al 30 settembre.