Generali takes hit on RU-UA positions; had boasted €683m investments pre-war

Generali ended 2021 with total investment exposure in Russia and Ukraine of €683 million, but it has since written off its operations and massively written down investment positions by some 74%.

Russia's invasion of its southern neighbour also creates much greater uncertainties than those immediately visible on the balance sheet, management said in comment to Q4 earnings.

The "recent Russian-Ukrainian conflict has resulted in a context of greater uncertainty and volatility and a risk of a downward revision of growth estimates," management said.

"To date, the development of the conflict remains unpredictable and consequently it is not possible to make a reasonable estimate of the effect of the crisis on the markets and on the insurance business."

The total exposure sum is dominated by Generali's 35% stake in unlisted Russian insurance company Ingosstrakh, booked end-2021 at fair value of €384 million and an amortized cost of €231 million.

That stake is now booked as a for-sale asset with permanent impairment. Generali has previously announced it had pulled its board members and will dump the stake.

Direct investments in Russian and Ukrainian fixed-income securities, almost exclusively in USD and EUR, had been listed at €188 million at year-end, representing 0.04% of total assets. Those positions are marked down to €49 million as of March 7.

Indirect investments, about one third equity and two thirds fixed-income, had been marked at €111 million end-year, but are now booked for a total of €29 million.

The underwriting exposure on life and P&C segment is negligible at €14 million premiums and is related to local companies, including the minority-held insurer.

Third-party AUM exposure in Asset Management at around €530 m (figure as of FY21).

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