Consolidated results at 30.09.2013

Consolidated results as at 30 September 2013 (*)

Net profit rises to € 1.6 billion (+40.4%)

Operating result € 3.4 billion (+6.2%) driven by P&C segment (+20.3%)

Total premiums € 49 billion (+0.6%) in a challenging macroeconomic environment

Solvency I 152% as of end of October. At the end of September was 143% (139% 1H13)

Life: Solid operating result at € 2.1 billion (-2%), in an ongoing low interest rate environment, with a significant turnaround in the third quarter (+13.2% vs Q312)

• Life premiums € 32.8 billion (+0.9%) led by linked contracts (+10.5%). New business in terms of APE € 3.2 billion (+1.1%) with an increased New Business Margin at 20.9% (20.5% 9M12)
• Strong growth in Life net inflows to € 6.5 billion (€ 1.1 billion 9M12) with a marked improvement in all major markets

P&C: Sharp increase in operating result to € 1.3 billion (+20.3%) driven primarily by technical performance

• Combined ratio improves to 95.1% (-1.6 p.p.) despite greater impact (0.5 p.p.) from NatCat claims from events such as the recent floods in Central Europe
• Premiums stable at € 16.2 billion (+0.1%)

Financial segment: Operating result € 367 million (+14.8%)

Clemente Rebecchini named as Vice-Chairman

The Generali Group CEO Mario Greco said: “With the actions we have taken over the past months I am pleased to report a significant improvement to our capital position, with a Solvency I ratio currently above 150%. We are making good progress with the transformation of our Group and today’s results demonstrate that we are on track to reach our targets. Now we will work with even greater focus on improving our profitability. We will give a further update on the delivery against our strategic plan at our Investor Day on 27th November”.

Milan. In a meeting chaired by Gabriele Galateri di Genola, the Assicurazioni Generali Board of Directors approved the consolidated results for the nine months to 30 September 2013.

The Group closed the first nine months of the year with a strong significant growth in net profit to € 1,591 million (+40.4%), buoyed by solid premium income and operating performance, which was supported, in particular, by the growth of the P&C segment. The aggregate operating result rose to € 3,361 million, an increase of 6.2% (€ 3,292 mln 9M12).

The P&C operating result improved by 20.3% to € 1,339 million (€ 1,158 mln 9M12), benefiting from a better combined ratio of 95.1% (-1.6 p.p.), despite the larger impact of natural catastrophes of 0.5 percentage points. The result of prudent underwriting policies and an efficient claims management contributed to the excellent performance of this segment.

In the Life segment, although the market’s low interest rates had an impact on the financial margin, the operating result remained sound at € 2,071 million (-2%; € 2,196 mln 9M12) and showed a significant turnaround in the third quarter (+13.2% from 3Q12). The performance of the segment’s technical margin was positive, thanks to the focus on products with higher margins: The New Business Margin rose to 20.9% (20.5% 9M12).

The operating result of the financial segment improved by 14.8% to € 367 million thanks to greater net commission income and realised gains.

Despite continuing difficulties in the macroeconomic situation in many European countries, the Group reported growth in overall gross premiums to € 49 billion (+0.6%), assisted by its strength in distribution and new business initiatives in both segments. Life production increased to € 32,808 million (+0.9%), driven by unit-linked products (+10.5%) and protection covers (+1.1%). New business in terms of APE also improved, to € 3,211 million (+1.1%; € 3,184 mln 9M12). Life net inflows showed almost six-fold growth (from € 1,142 mln 9M12 to € 6,477 mln), thanks to lower outflows and good production performance. Premiums in the P&C segment were stable at € 16,245 million (+0.1%) with solid performance in motor lines (+0.4%).

The Group’s excellent operating performance was accompanied by an improved capital position. Shareholders’ equity was up to € 19,223 million (+1.1%; € 19,013 mln FY12). The Solvency I ratio at 30 September was up to 143% (139% 1H13); at the end of October the ratio was up to 152%, including the positive impact of 5 percentage points from the sale of Life reinsurance assets in the USA and minority interests in Mexico, completed after the quarter end.

Group overall assets under management, including third-party assets, increased to € 497 billion (+2.3%; € 490 bln FY12).

In light of the action taken, despite the continuing uncertainties in the macroeconomic situation, consistently with its strategic goals the Group expects to report an improvement in its overall operating result for 2013 on a like-for-like basis, while continuing to strengthen capital and implement the strategic initiatives announced in January.

In the Life segment, the growth in annual premiums, which have higher margins, continued (+1.4%), while production of single-premium contracts was stable.

Looking at the individual markets, Germany registered an excellent performance, with premiums up 11.5%, driven largely by savings products (+23.2%), and in Italy, which reported growth of 6.4% due to the contribution of the traditional channel.

In France a sharp rise was recorded in premiums from linked products (+46.7%). Savings products were down 36.5% and general premiums fell by 22.8% (the production in the first part of 2012 benefitted from the exceptional measures taken to protect the savings portfolio).

The growth of unit-linked policies (+15.5%) kept premiums relatively stable in Central Eastern Europe (-1.6%), despite the fall in new business caused in part by the volatility of pension funds in Poland and the Czech Republic due to regulatory uncertainties.

New production in terms of APE rose by 1.1% due to excellent performance in Italy (+11.6%) and Germany (+15.6%). Overall, healthy improvements were reported in annual premiums (+1.5%) and in single premiums (+0.7%).

New Business Value was € 670 million (+7.3%).

The significant increase in Life net inflows, at € 6.5 billion, drove net technical reserves to € 320.9 billion.

 

Life Segment
€ mln	Gross premiums		APE		New Business Margin
	30/09/2013	Δ 9M13 / 9M12	30/09/2013	Δ 9M13 / 9M12	30/09/2013	30/09/2012
Italy	9,220	+6.4%	1,235	+11.6%	17.8%	21.2%
France	5,883	-22.8%	573	-22.7%	13.2%	12.4%
Germany	11,278	+11.5%	724	+15.6%	24.9%	19.8%
CEE	1,172	-1.6%	126	-14.1%	44.5%	35.2%
Rest of Europe	4,260	+3.8%	440	-1.2%	25.7%	22.6%
Rest of the World	995	+18.0%	113	+2.3%	22.6%	40.7%
Total	32,808	+0.9%	3,211	+1.1%	20.9%	20.5%

The positive trend in P&C premium income was driven above all by growth in motor lines (+0.4%). Looking at the individual markets, performance was exceptional in Germany (+4.4%) – due to motor lines (+7.9%) and non-motor lines (+2.1%) – in Austria (+2.3%) and in Switzerland (+0.6%). In Italy and in France, premiums slowed in line with the market.

With regard to country-by-country technical profitability, a significant improvement was reported in the combined ratio, particularly in Italy (-6.1 p.p.) and in the Central Eastern European countries, where the combined ratio improved by 1.1 p.p. to 89.3%, despite the recent floods in Central Europe, and was the best ratio of the Group. In Germany too, the combined ratio remained strong (95.9%, +1 p.p.), despite the 5.6 percentage point impact of flooding.

P&C Segment
€ mln	Gross premiums		Combined Ratio
	30/09/2013	Δ 9M13 / 9M12	30/09/2013	Δ 9M13 / 9M12
Italy	4,690	-5.6%	91.5%	-6.1 pp
France	2,752	-5.6%	98.4%	-0.1 pp
Germany	2,804	+4.4%	95.9%	+1.0 pp
CEE	1,465	-1.1%	89.3%	-1.1 pp
Rest of Europe	3,541	+0.6%	95.8%	-0.5 pp
Rest of the World	993	+42.4%	105.7%	+8.0 pp
Total	16,245	+0.1%	95.1%	-1.6 p

Group asset management operations in the first nine months reflected an excellent performance, assisted by the contribution of Banca Generali. Third-party assets under management increased by 3.7% to € 100 billion. Thanks to higher commission income and an increase in realised gains on equities, the segment’s operating result rose by 14.8% to € 367 million.

The Board of Directors has appointed Mr Clemente Rebecchini, member of the same Board, as Vice-Chairman of the Company. Mr Rebecchini is a member of the Risk and Control Committee and Investments Committee and has joined the Generali Board of Directors in 2012.

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Generali announces also the corporate calendar for the business year ending 31 December 2014:

 

Date	Event	Topics*
Wednesday 12 March 2014	Board of Directors	Approval of consolidated financial statements and draft separate financial statements for the year to 31 December 2013
Thursday 13 March 2014	Result release
Wednesday 30 April 2014	Annual General Meeting	Approval of the 2013 separate financial statements
Wednesday 14 May 2014 Thursday 15 May 2014	Board of Directors Result release	Approval of the quarterly report at 31 March 2014
Wednesday 30 July 2014 Thursday 31 July 2014	Board of Directors Result release	Approval of the half-year report at 30 June 2014
Wednesday 5 November 2014	Board of Directors	Approval of the report to the 9 months at 30 September 2014
Thursday 6 November 2014	Result release

 

The dates given above are provided purely as general indications: Any changes will be promptly announced to the market, using the channels used to distribute this statement. The information provided in this statement is also available on the company website www.generali.com.

 

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The interim report is available in the Investor Relations section of the website www.generali.com

The Manager in charge of preparing the company’s financial reports, Alberto Minali, 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.

(*) Change in premiums, net inflows and APE is calculated on a like-for-like basis (on equivalent exchange rates and consolidation area). Changes in operating results and own investments exclude Mexican companies and US life reinsurance business from the comparative period.