What happens on coupons and dividends between Ivass and Assicurazioni Generali?
Remote questioning between Assicurazioni Generali and the Ivass sector authority on the failure to distribute the second tranche of the Leone dividend. Here are the accounts of the insurance group and the scenarios outlined by Donnet
"The regulator did not allow the distribution of the second tranche of the dividend on the 2019 results but the Generali group is solid and today's results prove it, we are proud of our resilience and our solidity in a very complicated context such as the current one. ”Said the CEO of Generali, Philippe Donnet, opening today the conference call of the analysts. The manager also said he spoke with Ivass in recent days and that the Authority would not be inclined to maintain the restriction on dividends in 2021, Radiocor added .
THE WORDS OF DONNET DI GENERALI
"We have a very strong capital position and the best Solvency in the sector", added the CEO, underlining that the payment of the entire 2019 dividend and the 2020 pro-rate are taken into account in the calculation of the Solvency. we must comply with the requests of the regulator, we confirm the dividend policy of the plan and we will pay the 2019 cash coupon as soon as we can ".
THE VOICE OF IVASS
Donnet's words prompted Ivass to make a clarification. The recommendation to European insurance companies not to distribute dividends this year came from Eiopa, the European insurance authority, last March. This was recalled by sources from Ivass, the Italian authority, after the statements made this morning by Generali's top management on the non-distribution of coupons by the Lion of Trieste. The recommendation is the same that the ECB has given to the banks followed by the national central banks. A recommendation in this sense, recalled by IVASS, was also received in May by the European Committee for Systemic Risk, which has macroprudential supervisory responsibilities, and is linked to the uncertainty arising from the Covid-19 pandemic and does not depend "on solidity of individual companies ". The request for IVASS, therefore, is in the interest of the companies and the insured customers "as it strengthens the solidity of the insurance market in a period characterized by recession and uncertainty".
THE GENERAL INSURANCE ACCOUNTS
Generali's board of directors approved the nine-month accounts that see an operating result up to 4 billion (+ 2.3% and in the upper part of the consensus range), "due to the development of the Non-Life and Asset Management segments" despite an impact related to Covid estimated at 125 million. Group net profit, on the other hand, fell to 1.297 billion (-40%), "affected by 310 million in net write-downs on investments deriving from financial market trends, 183 million for Bsi" and other charges of 173 million (provision international Covid and liability management). Net of the latter, it would stand at 1.629 billion (-13%).
THE PERFORMANCE OF GENERALI
The Combined Ratio improved to 89.7% (-2.8 percentage points) while total gross premiums amounted to 52 billion (+ 0.3%), with "resilient" Non-Life premiums and a positive trend in the Life segment ( + 0.4%). Solvency strengthens to 203% (up by nine points on 2020). With regard to the foreseeable evolution of operations, Generali expects the operating result to continue to be "resilient in 2020 although likely to decline compared to 2019". The net result is also expected to decrease but the group remains focused on the execution of the strategy by 2021. As regards the dividend chapter, of which a second tranche of 0.46 euros per share remained to be paid in 2020, Generali essentially has confirmed ("intends to submit to the shareholders' meeting also the distribution of the second tranche in 2021") but will pay it next year after the request made by Ivass, which in turn acknowledged the ESRB recommendations on coupons at EU level .
DIVIDEND DOSSIER
On the coupon, the board of directors verified compliance with the limits set by the Group Risk Appetite Framework at 30 September 2020 with the Solvency at 203% and "therefore fully within the desired operating range of 180% -240%". The board “recognizes the importance of the dividend contribution for the numerous institutional investors and small shareholders, particularly in the current context”. However, the board took note of the letter received from IVASS on 10 November 2020, in which the Supervisory Authority told the company that the application of the recommendation made by the European Committee for Systemic Risk (ESRB) in June 2020 and still in force with regard to the distribution of dividends is of a general nature and does not contemplate a case-by-case assessment, therefore deeming the group committed not to pay the second tranche. The board of directors "therefore resolved to comply with the current requests of the Supervisory Authority and consequently not to proceed with the disbursement of the second tranche of the 2019 dividend by the end of the year".
I FOCUS
The Generali Group "remains focused on pursuing the dividend policy and, in particular, on achieving the objective set out in the strategic plan for the distribution of cash dividends for 4.5-5 billion in the period 2019-2021, subject to supervisory recommendations ". Therefore in 2021 "subject to the positive orientation of the Supervisory Authority, it intends to submit the distribution of the second tranche of the 2019 dividend for the approval of the shareholders".
CATHOLIC DOSSIER
Cattolica is a very good deal from a financial and strategic point of view for Generali and will create value for both companies, CEO Philippe Donnet said on a conference call, adding that the Trieste group is ready to 'look to the future together'. Catholic. 'We have 24.4% of Cattolica after the capital increase just completed and a strategic partnership on various sectors that will create' value ', he concluded.
OPPORTUNITIES'
“With Covid, very attractive M&A opportunities have been created for Generali and we will be disciplined and opportunistic”, said the Group CEO, Philippe Donnet, in the conference call with the analysts. "We will continue to look to small and medium acquisitions to strengthen ourselves in the areas that interest us, for example in Eastern Europe, we have the resources to do so".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/che-cosa-succede-su-cedole-e-dividendo-fra-ivass-e-assicurazioni-generali/ on Thu, 12 Nov 2020 14:40:44 +0000.