Generali grows premiums 2.4%; defends profits chiefly via life margins

Generali grew its group gross written premium by a mere 2.4% in in the first half, led by attempts to drive its P&C business out of the automotive lines, and saw P&C profit growth lightly hampered by a rise in loss ratios.

By the bottom line,  Generali had held the decline in net profits to 9.0%, despite the slaughter visible on markets undermining investment results. Management claimed stable operating results year on year excluding Russian impairments. Rising operating results in life contributed as  Generali continues to rework its business mix.

CEO Philippe Donnet devoted his Q2 comment to fighting a bygone battle, ballyhooing the value of his new corporate strategy that had been at the core of a 2021 proxy fight for corporate leadership.

That strategy drove Q2 and "is the right way to deliver sustainable growth and increase operating profitability," he said. "In the months to come, we will continue to be fully committed to the execution of our three-year plan as we reinforce our Group's leadership as a global

insurer and asset manager.”

Gross written premiums rose 2.4% y/y to €41.9 billion with 8.5% growth in P&C more than compensating for a marginal decline in the life segment.

P&C premium growth remains tilted away from anathema motor lines. Primary non-motor GWP was up 10.7% to nearly €8.8 billion, ahead of 4.6% growth in the motor book to €5.2 billion.

Mark P&C GWP up 4.9% in the home market of Italy, although the home market leads in growth outside of motor. That put Italy P&C growth ahead of 5.1% in France and 2.5% in Germany. Central Europe delivered 6.8% and remaining international 10.3% growth.

The P&C combined ratio of 92.5% was up 2.8 percentage points (pps) from the prior year period, including a 2.6 pps gain in the loss ratio. Underwriting profitability is a struggle in France, where the combined ratio rose 3.3 pps to 99.2%, and in international operations, up 4.2 pps to 99.5%.

Natural catastrophe contributed 2.2 percentages points to the combined ratio, up from 2.0 pps in the prior year period.  The current year non-cat loss ratio rose 1.9 pps.

Amongst drivers, management called out hyperinflation in Argentina (without naming garden variety inflation in any other jurisdiction) and built an adjusted combined ratio ex-Argentina at 9.1.%, 2.5 pps above the prior year period.

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