12 March 2015 Insurance

Generali ahead of schedule despite profit fall

Italian insurance group Generali posted a fall in profits for 2014 but said its three-year turnaround plan one year ahead of schedule.

Its profits fell to €1.7 billion in 2014, compared with €1.9 billion in 2013, as the insurer reported €400 million of one-off charges.

Generali’s operating result rose to more than €4.5 billion for the year ended December 31, 2014, an increase of 10.8 percent compared with €4.1 billion in 2013.

This was driven by significant growth in both segments with 15.2 percent growth in life and 13.1 percent growth in property and casualty (P&C).

Generali’s gross written premiums (GWP) increased by 7.7 percent to €70.4 billion for 2014, compared with €65.9 million in 2013. This was mainly driven by the growth of unit linked products in the life segment.

The insurer said that the increasing results from the life segment, was particularly successful in Italy, France and in EMEA.

It added that growth has resumed in all lines of business and unit linked contracts have experienced a strong developed (an increase of 43 percent) in line with the strategy to focus on products with low capital absorption.

Generali’s P&C segment posted stable GWP of €20.6 billion. Its motor line marked a slight growth of 0.8 percent, primarily driven by solid performance in Germany and Latin America. The non-motor line grew in the commercial/industrial line by 1.7 percent, which compensated for a drop in accident and health products of 1.2 percent.

Its combined ratio improved nearly 2 percentage points to 93.8 percent, driven by a lower loss ratio and cost containment.

Mario Greco, chief executive officer of Generali, said: “The transformation of Generali has been achieved, and on behalf of all our employees, I am proud to confirm that the targets set out in January 2013 have been met one year in advance.

“With this turnaround we have been able to generate €18 billion for our shareholders and are confident that we will deliver further value in the future. Today, Generali is focused on its core insurance business, more disciplined in the management of its balance sheet and capital, and more simple and transparent in its geographic presence and governance.

“The financial performance of our business over the past year, despite an unprecedented challenging market environment, reflects the commitment of our people around the world to keep our promise to customers and all of our stakeholders.

“Generali has never been on a more solid footing and ready to compete and win in today’s highly competitive markets. We are now preparing to begin a new chapter in our history and we look forward to presenting the next phase of our strategy in May.”

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