Consolidated results at 31.12.2010. Net profit € 1.7 billion (+30%). Dividend rises to € 0.45 per share (+28.6%)

16 March 2011 - 17:09 price sensitive

Net profit € 1.7 billion (+30%)

Dividend rises to € 0.45 per share (+28.6%); pay-out at 41.1%


  • Life operating result (+23.5%) buoyed by higher volumes, stable technical margins and excellent performance in financial and real estate operations
  • Non-Life operating result at € 1.1 billion (-11.4%), with Combined Ratio at 98.8% (98.3% FY09) with an impact from claims related to natural catastrophes of 1.9 p.p.


  • Strong growth of Life production due to premium income in Italy (+6.8%), Germany (+12.5%) and Eastern Europe (+5.6%). Continued strong growth in China (+44.7%)
  • Robust growth in Non-Life (+2.1%), due in particular to results in Italy and France
  • Life net inflows again amongst market’s highest, at more than € 16 billion (+0.3%), pushing Life net technical reserves to € 313 billion (+9.4%)

We confirm the high strategic importance of operations in Eastern European countries. Their impact on Group’s operating result rose from 1.8% to 9.3% between 2007 and 2010.

Generali Group CEO Giovanni Perissinotto said: “The 2010 results show that, despite continuing difficulties in the economic and financial environment, Generali is making robust progress, with its best-ever result in the Life sector, thanks in particular to its investment management performance. The key drivers behind these results are our solid distribution model based on proprietary networks, leadership in core markets – Italy, France, Germany – and excellent positioning on markets with high growth potential.
“The strength of our distribution network, the quality of our Life and Non-Life premiums and our investment management capabilities give us confidence in our ability to forecast a continuing growth trend in our results over the medium term too, as the markets where we operate gradually stabilise and interest rates show a moderate increase”
,  the Ceo added.

Trieste – The Board of Directors of Assicurazioni Generali is holding a meeting today, chaired by Cesare Geronzi, to approve the consolidated financial statements and the parent company preliminary financial statements for 2010.

Generali closed 2010, another year of market uncertainty and volatility, with robust growth in premiums to more than € 73 billion (+3.8%) and high profitability, as demonstrated by an operating result rising to more than € 4 billion (+11.7%), in the upper end of the range set for 2010 a year ago. Thanks to a distribution model based on strong proprietary networks, an effective geographical diversification strategy, firm control over cost dynamics and the excellent trend in technical and investment operations, Generali reported net profit of € 1,702 million (+30%; € 1,309 million in 2009), one of the strongest performance improvements in the insurance industry.

The total operating result was supported by the increase in the Life operating result to
€ 3,026 million (+23.5%; € 2,451 million in 2009), the largest result ever posted by the Group for this business. This outcome was obtained through a growth of premium volumes based on high value-added products and the positive contribution that investment management gave to the Life financial margin. Life results benefitted from good trends in Italy (+17.6%), Germany (+46.9%) and France (+31.1%).
In Non-Life, where a strong recovery was reported in the fourth quarter (+18.1% on 4Q09), the operating result was € 1,128 million (-11.4%; € 1,274 million in 2009). Catastrophic events – in particular in Central-Eastern Europe – were a key factor during the year, with an impact of ABOUT € 380 million (an increase of € 110 million from 2009). The result was also influenced by the trend in short-term interest rates, a significant factor in Non-Life investments, which remained at low levels for the entire year.
A prudent underwriting policy, optimisation of claims processes and control of administrative expenses enabled the Group to maintain positive technical margins in its Non-Life business. The Combined Ratio was 98.8%, in line with the value for the first nine months and only slightly higher than at the end of 2009 (+0.5 percentage points; 98.3% at the end of 2009), despite the impact of catastrophic events (Xynthia storm, floods in France and Central-Eastern Europe and the Chile earthquake), which accounted for 1.9 percentage points.

A positive contribution to the growth in the overall result came from the containment of Group administrative expenses, whose weight relative to net premiums showed a further decrease to 3.2% (3.3% at the end of 2009).

Operating result
€ mln Life operating result Non-Life operating result Total operating result
  31/12/2010    Δ 31/12/2010    Δ 31/12/2010    Δ
Italy 1,188 +17.6% 206 +271.4% 1,537 +29.8%
France 596 +31.1% 149 -39.3% 754 +6.8%
Germany 354 +46.9% 308 +19.2% 713 +29.6%
CEE 177 -40.4% 218 -32.2% 419 -34.5%
Total 3,026 +23.5% 1,128 -11.4% 4,077 (1) +11.7%
(1) Group total operating result includes results of Life, Non-Life and Financial segments, holding expenses and consolidation adjustments


Overall, investments where risk is borne by the company stood at € 322 billion, up from € 307 billion at the end of 2009, subdivided as follows: fixed-income instruments 79.2%, equities 8.5%, real estate 4.9%, other investments 3.7%, cash and cash equivalents 3.8%.

Own investment (1) 31/12/2010 31/12/2009
Fixed-income instruments 79.2% 78.6%
Equity 8.5% 9.1%
Real Estate (2) 4.9% 4.8%
Other3 7.5% 7.6%
Total €321.7 bln €307.3 bln
(1) Own investments include own capital and insurance funds (i.e. unit linked excluded)
(2) Including mutual funds

(3) Including cash & cash equivalent, investments in subsidiaries, associated companies and JVs, derivatives, receivables from banks or customers

The Group investment strategy gave priority to investments intended to conserve current profitability at a time of low interest rates, especially in the short term, without altering the risk profile significantly. Dynamic management of investments generated current profitability of 4.2% computed on balance sheet-values (4.3% at the end of 2009).
As part of the strategy described above, in the first half of the year the Group raised exposure in corporate bonds and extended duration; in the second half, it took advantage of the rise in rates on government securities to reduce exposure in the corporate component and duration. Consequently, at the end of 2010, it had a small decrease in corporate bonds to 44.1% (45.3% at the end of 2009), against an increase in government instruments. Current profitability on bonds, computed on balance-sheet values, was 4.3% (4.4% at the end of 2009).
The Group also reduced the equities component, which generated current profitability computed on balance-sheet values of 3.2% (3.5% at the end of 2009). Real estate investments rose, with current profitability computed on balance-sheet values up to 7.8% (7.6% at the end of 2009).


The Group flanked its performance with the continuing strength of its capital structure, reflected in the increase in shareholders' equity to € 17.5 billion (€ 16.7 billion at the end of 2009). Generali’s capital solidity was also confirmed by its solvency ratios. The Solvency I ratio improved to 132% (128% at the end of 2009). Taking account of real estate capital gains available as per the authorisation of the Authority, the Solvency I ratio was 140%. The Solvency II ratio – computed using the internal Economic Balance Sheet model on an AA rating – was 160% (187% at the end of 2009), with a reduction due to the above-mentioned trend in the spreads on Italian government bonds. Embedded Value, an intrinsic Group value, was € 27 billion (€ 27.3 billion at the end of 2009).


Based on these results, Generali will propose a dividend per share for 2010 of € 0.45, up by 28.6% (€ 0.35 in 2009). The total dividend on outstanding shares amounts to € 698.75 million with a 41.1% pay-out. The dividend will be paid from 26 May and shares will trade ex dividend as from 23 May 2011.


Premiums. Given the financial and macroeconomic outlook for 2011, in the Life sector the Group expects to confirm the ambitious production levels of 2010, although it will give priority to products with lower capital absorption and higher returns in terms of new business value, consequently maintaining new business margins, also thanks to the cost containment policy. In the Non-Life business the Group expects to confirm the premium growth rates of 2010, through healthy progress in the Non Motor lines and a recovery in the Motor line.
Non-Life profitability. Assuming a normalised level of catastrophic events, the Group expects to improve its overall technical margins due to the shift in the focus of its portfolio towards retail Non Motor lines and by maintaining current operating efficiency levels and the effects of Group tariff policies.

Investments. The financial and real estate investment policy will maintain prudent asset allocation in order to consolidate current margins. Specifically, the Group investment strategy will continue to focus on higher investment in government bonds and real estate to guarantee adequate medium/long-term returns, especially in the Life sector, and limit exposure to market volatility.
Given the scenario described above, the Group expects to report higher operating margins and a larger net profit in 2011.


Looking at production, Life gross premiums written totalled € 51,098 million (+4.5%; € 48,894 million at the end of 2009), a result due in particular to excellent performance in Italy (+6.8%), Germany (+12.5%), Eastern Europe (+5.6%) and the emerging countries. Strong growth was reported in China (+44.7%) and South America (+53.3%). In France premiums fell by 7.9% as a result of the decision to raise technical margins by giving priority to higher-yield policies over volumes.
Significant progress was also reported in new business in terms of APE, which rose to a record € 5,333 million (2.8%) thanks to the results reported in Italy (+3.6%) and Central Eastern Europe (+8.7%).

During 2010 new business focused on products with lower capital absorption and higher value added. This choice enabled the Group to maintain a high New Business Value at € 1,050 million (-6.9%) with New Business Margins (NBM) at 19.7%, well up on the first half of 2010 (17.8%). The slight decrease with respect to the situation at the end of 2009 (21.7%) was largely the result of the broader spread between government rates and the swap curve (country risk perception), which had a negative impact, especially in Italy.

Life net inflows (1) were once again high at € 16.1 billion (+0.3%), driving growth in Life net technical reserves to € 313,348 million (+9.4%; € 286,404 million at the end of 2009).

Life gross premiums and net inflows
€ mln Gross premiums Net inflows
  31/12/2010 31/12/2009 Δ 31/12/2010 31/12/2009 Δ
Italy 13,794 12,913 +6.8% 1,79 1,182 +51.4%
France 11,394 12,377 -7.9% 4,444 5,841 -23.9%
Germany (1) 13,756 12,229 +12.5% 4,923 4,077 +20.8%
CEE 1,766 1,672 +5.6% 534 700 -23.8%
Total 51,098 48,894 +4.5% 16,133 16,083 +0.3%
(1) Including Health business



In a still uncertain macroeconomic scenario, the Group reported an upturn in Non-Life premiums (+2.1% to € 22,090 million), driven in particular by France (+3.7%) and Italy (+1.2%).
Looking at the portfolio breakdown, where the retail component accounted for approximately 77.2%, motor premiums stood at 40.5% and non-motor premiums at 59.5%.

The reserve ratio (total net reserves/ net retained premiums) was 148.8%, substantially in line with the figure at the end of 2009 (149.1%), confirming the Group’s prudent reserving policy.

Non-Life premiums and Combined Ratio
€ mln Gross premiums Combined Ratio
  31/12/2010 31/12/2009 Δ 31/12/2010 31/12/2009 Δ
Italy 7,44 7,353 +1.2% 99.6% 102.4% -2.8 pp
France 3,892 3,754 +3.7% 101.3% 99% +2.3 pp
Germany 2,998 3,034 -1.2% 95.2% 95.6% -0.4 pp
CEE 2,246 2,204 +1.9% 93.2% 87.9% +5.3 pp
Total 22,09 21,636 +2.1% 98.8% 98.3% +0.5 pp


In Asset Management, assets under management totalled € 432,043 million (+6.4% from the end of 2009), with third-party assets at € 92,980 million (+17.3%).

The operating result in the Financial Services segment was € 354 million, down by 18.2% from the end of 2009, largely as a result in investments in the BSI Group expansion programmes in the Far East. Net commissions were € 894 million (+12.8%) compared with € 792 million in 2009.


In 2010 for the first time the Group consolidated financial statements analyse a set of social and environmental performance indicators, relating in particular to value added, human resources, community and environment.

Specifically, Global Added Value (GAV), which reflects wealth generated by Group operations for the various stakeholder categories, rose by 7.9% from 2009. The amounts for all stakeholder categories increased, with the exception of lenders due to the fall in market rates.

Distribution of Global Added Value
€ mln 31/12/2010 31/12/2009 Δ
Group 1,003 764 +31.3%
Shareholders 1,015 1,002 +1.3%
Employees 4,144 3,931 +5.4%
Agents and advisors 5,318 5,136 +3.5%
State 869 498 +74.5%
Lenders 1,237 1,263 -2%
Community 46 41 +10.4%
Global Added Value 13,633 12,635 +7.9%

With reference to recent press reports on relations with the Czech PPF Group, we would point out that the Generali- PPF joint venture established in Central Eastern Europe is an operation of great strategic importance, and has enabled the Generali Group to become one of the leading operators in an area with high profitability and significant growth potential. The CEE countries have in fact become one of the 4 most important areas for our Group, as reflected in the growth in the weight of their operating result to the total from 1.8% in 2007 (the year before the formation of the joint venture) to 9.3%  in 2010; the area’s contribution to aggregate premiums has also risen, from 2.4% to 5.5%, a lower rate than the growth in the operating result, which demonstrates the excellent profitability of the area in question. 

The Manager in charge of preparing the company’s financial reports, Mr Raffaele Agrusti, declares, pursuant to paragraph 2 article 154 bis of the Consolidated Law on Finance, that the accounting information in this press release corresponds to the document results, books and accounting entries.

(1) Premium income less maturities and surrenders