Outlook and 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.
The insurance industry faces unprecedented challenges. In an operating context made even more complex by the pandemic, we have continued to monitor the mega trends that pose significant risks and opportunities for the Group and for our stakeholders, with a view to sustaining our ability to create value over time. The speed at which technological innovations are spreading and increasing digitalisation are affecting consumer behaviour, modifying operating processes and working methods. The regulatory framework is getting stricter.
In addition, the industry in which we operate is also at the crossroads of some of the great contemporary issues: pandemics and extreme events; climate change; geopolitical and financial instability; digital revolution and cyber security; ageing and new welfare.
However, these challenges can also be opportunities to offer our customers new and increasingly customised protection models.
In the nearly two centuries of its history, Generali has demonstrated its resilience and helped people build a safer future by caring for their lives and dreams, and it will continue to do so in the future, even more. The success of the results achieved with the "Generali 2021" strategy, in fact, allows us to bring forward this commitment, and thanks to the new strategic plan Lifetime Partner 24: Driving Growth we will continue to drive sustainable growth for all stakeholders, setting even more ambitious goals.
LIFETIME PARTNER 24: DRIVING GROWTH
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.
"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 presented in the plan 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, 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.
Generali will continue to boost P&C revenues and maintain best-in-class technical margins by improving its market share in areas with significant growth potential, including SMEs, Health, senior care in Europe and Travel in the US.
In the Life segment, the Group will also grow its capital light business and technical profits, driving unit-linked business volumes and further internalizing margins. Growth will be underpinned by effective cost management, with continued cost discipline in mature markets and focused investment in Asia and on fee-related business.
Generali will continue to improve the profile and profitability of its Life business, undertaking a comprehensive in-force optimization exercise to reduce capital intensity and enhance operating results.
Following the same disciplined approach that saw Generali invest over € 3 billion on value-accretive M&A during the current strategic cycle, the Group will deploy its capital on profitable growth initiatives. Generali will target opportunities to strengthen its insurance leadership in Europe and expand its presence in selected Asian growth markets.
In Asset Management, the Group will continue to invest in product and distribution capabilities – including expanding its private asset capabilities – to build scale and generate an additional € 100 million in third-party revenues.
Investments in digital technology will total € 1.1 billion during the plan horizon, a 60% increase on the last strategic cycle. This includes further investment in Generali’s Lifetime Partner relationship model to increase customer value by scaling digital advisory capabilities and establishing a seamless omnichannel approach across all distribution channels.
The Group will also invest in scaling up shared platforms, new data capabilities and in the wider adoption of smart automation and artificial intelligence technologies. This will reduce costs and enhance Generali’s operating leverage – supporting a 2.5-3.0 percentage point improvement in the Group’s cost to income ratio.
Generali’s technical leadership will be further enhanced by a powerful innovation engine that combines both internal and partnership-driven activities. A new € 250 million insurtech venture fund will allow Generali to harness high-potential opportunities. The Group will also launch a new digital direct operation to capture a larger share of digital profit pools in Europe.
Generali is committed to acting as a force for good in building a more resilient and just society. ESG commitments are embedded within this strategic plan, including growing premiums deriving from sustainable solutions, by 5-7% CAGR by 2024 and the complete integration of ESG criteria into the direct investments of the Group’s general account portfolio by 2024. Generali will also reduce the carbon footprint of the corporate investments portfolio by 25% by 2024 in line with its commitments as a member of the Net-Zero Asset Owner Alliance and make € 8.5 - € 9.5 billion of new green and sustainable investments between 2021 and 2025.
The Group also defined a roadmap for the complete exclusion of investments and underwriting activities in the thermal coal sector and is forging ahead with the commitment to no longer insure upstream oil and gas activities.
Generali’s SME EnterPRIZE project is helping SMEs make a sustainable transition while the Group’s flagship social initiative – The Human Safety Net – will unlock the potential of people living in vulnerable conditions.
Over the course of Lifetime Partner 24: Driving Growth, the Group will focus on enhancing its customer-centric and meritocratic culture and developing competencies, which includes upskilling 70% of Generali’s employees with new digital and strategic skills by 2024.
Generali’s people will continue to be supported by fair processes and equal opportunities, considering diversity in all its components as a value and in particular aiming to have women in 40% of leadership positions by the end of the plan period. Generali is also committed to embrace new sustainable and balanced hybrid work models in all its entities, delivering important benefits to its employees and stakeholders in the “Next Normal”.