Profits and premiums dip at Generali but it stresses recovery is underway

Italian insurer Generali’s gross written premium dipped in the first nine months of 2016 but this was mainly due to increased discipline in its life business; its property/casualty units have enjoyed some growth.

The company’s gross written premiums reached €52.1 billion in the first nine months, a decline of 2.8 percent compared with the same period a year earlier. Within this number, its P&C book grew by 1.5 percent, however, and its life book shrank by 4.5 percent, which Generali said was due to an increasingly disciplined approach.

Its operating result for the nine months was €3.6 billion, down 5.6 percent compared with the same period a year earlier, but the company highlighted the fact that a recovery is underway with the operating result in the third quarter alone improving by 7.3 percent year on year (YOY).

Its net profit for the first nine months was €1.6 billion, down 5.9 percent YOY but, again, its performance improved in the third quarter, which was 6.4 percent better that the same period a year earlier.

Its combined ratio for the first nine months is now 92.4 percent, a marginal improvement of 0.2 percent on a year earlier.

The company stressed that its results have been achieved within a financial context characterized by low interest rates and also reflect planned lower realised gains as a result of managerial action in line with the strategy of preserving future profitability.

Alberto Minali, the CFO of Generali, said: “The results presented today confirm the strength of Generali’s business model. In fact, in a still difficult market context, Generali continued its disciplined management of life business, which aims to favour its quality and profitability.

“In property & casualty, premiums increased, which allows us to make progress in a segment with excellent profitability levels. Thanks to the quality of these revenues, which are the result of the work of all our employees and networks, technical performances improved further, particularly in the third quarter, which registered improved operating result and net profit.

“This is despite the fact the investment results declined, due to the planned lower realisation of gains, the ongoing market volatility and persistently low interest rates. The annualised operating RoE, which reflects the slowdown registered in the 2015 final quarter, will be line with the targets at the end of this year. The solidity of these results is further confirmed by the capital position of the Group, which remains at very good levels despite the challenging economic environment.”