Insurance, as Generali di Donnet is doing
Facts, figures and insights into the half-yearly report of the Assicurazioni Generali group
Generali also celebrates an excellent half-year. The insurance group led by the CEO, Philippe Donnet (in the photo), achieved a normalized net profit of over 2.3 billion, from almost 1.5 billion a year earlier, and a net profit of over 2.2 billion from the previous 864 million. Good news also for the shareholders who could go, if not used for M&A operations, around 500 million. Certainly, the Lion of Trieste expects to distribute total dividends to shareholders between 5.2 and 5.6 billion in the period 2022-2024.
PROFIT, OPERATING RESULT AND PREMIUMS INCREASE
The half-year performance, explains the note accompanying the accounts, was achieved thanks to the improvement in the operating result, the non-recurring profit relating to the sale of a London property complex (193 million net of tax) and the impact of 97 million writedowns on Russian fixed income instruments.
Going into detail, the operating result of the group rose to 3.7 billion (+28%): in particular, the operating result of the Non-Life segment reached 1.85 billion (+85.7%) while that of the Life segment fell to 1, 81 billion (-3.5%). Plus sign for the operating result of the Asset & Wealth Management segment – at 498 million (+1.3%), thanks to the important contribution of Banca Generali – and minus instead for the Holding segment at -125 million, however improving from -149 million in the first half of 2022.
In terms of premiums, gross premiums exceed 42 billion (+3.6%), thanks to the strong development of the non-life segment which gives a contribution of 16.3 billion (+10.6%). Slight drop for gross premiums in the life segment, to almost 25.6 billion (-0.3%); in this context it should be noted that premium income stood at -877 million, with net outflows in the savings line only partially offset "by positive net flows in the unit-linked lines and pure risk and health".
Group shareholders' equity grew slightly, but did grow, to 26.7 billion (+0.2%) and the Contractual Service Margin, which consists of the discounted future profits of the existing portfolio, to 32.1 billion compared to 31 billion of last year. And again: Generali's total Assets Under Management reach 631.0 billion (+2.6% compared to the whole of 2022) and the Solvency Ratio to 228% (221% in 2022 total).
BECAUSE THE NON-LIFE OPERATING RESULT EXCEEDS THAT OF LIFE
During the conference call with journalists, as reported by Ansa , Cristiano Borean, CFO of the insurance company, explained why the operating result of the Non-Life segment exceeds that of the Life segment. “There is an important phenomenon in 2023, there is the change in accounting standards, which provide for a discount on the value of claims on damages. This entails a benefit deriving from the increase in rates compared to the previous standards. So there is really a different representation of the non-life results compared to what was in the past” he concluded.
FORECASTS: DIVIDENDS BETWEEN €5.2BN AND €5.6BN
“Thanks to the business actions taken to maintain profitability and the strategic initiatives launched in line with the plan – reads the note accompanying the accounts -, the Group confirms its commitment to pursue sustainable growth, improve the profit profile and drive innovation to achieve a compound annual growth rate of earnings per share of between 6% and 8% over the period 2021-2024, generate net free cash flows at the Parent level in excess of 8.5 billion in the period 2022-2024 and distribute to shareholders cumulative dividends in the period 2022-2024 in the amount of between 5.2 billion and 5.6 billion".
DONNET: MIDDLE OF PLAN IN LINE WITH OBJECTIVES, POSSIBLE 500 MILLION PER SHAREHOLDERS
Satisfied Donnet according to whom “the excellent results of the first half of 2023 continue to demonstrate the effectiveness of our 'Lifetime Partner 24: Driving Growth' strategy and how Generali is increasingly profitable, diversified, resilient and with a solid financial position. Halfway through the implementation of the plan – he said during the call with journalists -, we are fully in line to achieve our ambitious objectives, confirming that we have the solidity necessary to successfully govern the complex macroeconomic and geopolitical scenario in constant evolution " .
The French CEO has no doubts that Generali will be strengthened “by the recent acquisitions of Liberty Seguros and Conning, which will allow the consolidation of our insurance leadership in Europe and the expansion of our asset management platform globally”.
As reported by Radiocor , Donnet clarified that "within the current plan, approximately 500 million remain available to Generali for any further M&A" and that "if not used, they will be returned to the shareholders at the end of the business plan" . The manager then explained that “a large part of the cash resources dedicated to the M&A have been committed to the plan. Liberty was paid 2.3 billion, another 500 million have already been committed for Cattolica and for the acquisition of control of the joint ventures in India: 200 million remain available, to which must be added 300 million of excess capital in Liberty Seguros , therefore a total of 500 million”.
DONNET: CONTINUE WITH SALE OF LIFE PORTFOLIO
During the call with journalists, Donnet spoke about another aspect of Generali's strategy. “On the Life portfolio we are always engaged in capital optimization work. As we announced a couple of years ago when we announced the plan, market conditions have changed our approach a bit because the rate hike has increased the value of these portfolios. We are always looking for solutions to optimize the management of these Life portfolios through cessions or reinsurance or other instruments, but nothing to announce at this moment".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/assicurazioni-come-va-generali-di-donnet/ on Wed, 09 Aug 2023 14:18:57 +0000.