The board of Generali gave the green light to first quarter accounts, closed with gross premiums increasing by 21,4% to 26,4 billion thanks to an excellent performance in the Life segments, whose collections returned to positive 2,3 billion, and Non-Life, which benefits from the consolidation of Liberty Seguros.
Generali's first quarter
In the first quarter of 2024 Generali recorded a normalized net profit of 1,1 billion, down by -9% compared to the same period of the previous year. The result, however, would have increased by 8% excluding the non-recurring profit of 193 million (after tax) realized in the same period last year from the sale of a property in London. Analysts expected a net profit of 979 million euros.
The operating profit grew to 1,9 billion, up by +5,5%. THE gross premiums are increasing to 26,4 billion (+21,4%), thanks to both the life and non-life segments and the consolidation of Liberty Seguros in February.
Back in particular Life net inflows were positive at 2,3 billion entirely guided by the pure risk and health and unit-linked lines, in line with the group strategy. In detail, the Life operating result rose to 969 million (+4,9%) while the Non-Life operating result reached 867 million (+2,4%), also thanks to the contributed by Liberty Seguros, consolidated starting from February 2024. However, margins on new Life production are decreasing, with the New Business Margin stands at 3,94% (-1,79% compared to a year ago). “By neutralizing the accounting effect of the pure French collective risk and illness business, the reduction in margins would have been halved approximately to -0,9 percentage points. In addition to this effect, the reduction mainly reflects the initiatives to support net funding in Italy, the effect of lower interest rates and a greater weight of China", explains Generali in a note.
The operating result of the segment Asset & Wealth Management records significant growth to 263 million (+16,7%), «thanks to the strong performance of Banca Generali», while that of the Holding and other activities segment stands at -129 million (-130 million a year ago)
The undiscounted combined ratio improved to 93,7% from 94,2%. From a financial perspective, the Solvency ratio at the end of the quarter it was equal to 215% from 220% at the end of 2023, a decline that reflects the acquisition of Liberty Seguros, which the Leone group began consolidating in February.
Generali finally confirmed the targets of the industrial plan which will conclude at the end of the year.
Generali: share repurchase of up to 300 million begins for Lti plan
Generali also announced that it will start thepurchase of treasury shares to be allocated to the execution of the group's long-term incentive plan called "LTI Plan 2023-2025” as well as all the remuneration and incentive plans approved by the meeting and still in progress.
The operation involves the purchase of a maximum number of 11 million and 300 thousand shares (with a maximum ceiling of 300 million euro) and the completion of any subsequent acts of disposal of the same. The buyback will start on May 22, 2024 and will end by August 2024.
Once the 500 million buyback approved by the last meeting and the buyback of own shares to service the 2023-2025 Lti plan (for a maximum of 300 million), Generali will no longer have cash margins to make acquisitions, specified the group's CFO, Cristiano Borean, in a conference call with journalists commenting on the first quarter accounts. At that point, he underlined, we will have 1 billion of liquidity buffers which we always prefer to maintain for risk management reasons.
CEO Borean: “Solid contribution from all businesses”
“In the first quarter of 2024, the growth of Generali's operating result continues, thanks to the solid contribution of all business segments, stated the CFO of the Generali group Cristiano Borean, underlining that “In the Life segment the group achieved positive net inflows , thanks to the strategic choices focused on the pure risk and health and unit-linked lines and thanks to the commercial actions implemented during 2023. The Non-Life segment also benefits from the consolidation of Liberty Seguros, an acquisition which is already contributing positively to the earnings profile of the group".
Finally, the manager highlighted that “thanks to the diversified insurance and asset management model and the solid capital position, driven by the strong normalized capital generation, we are fully in line to successfully achieve all the objectives of the 'Lifetime Partner 24' strategy : Driving Growth'”.
Genertellife incorporated by Alleanza Assicurazioni
On Monday evening the group also announced the green light from the boards of directors of Alleanza Assicurazioni and Genertellife for the merger by incorporation of Genertellife into Alleanza Assicurazioni. The operation was also approved by the boards of directors of the direct parent company Generali Italia and the parent company Assicurazioni Generali.
The incorporation will become effective on 1 January 2025, subject to obtaining the necessary supervisory authorizations and completing the related legal obligations.
The reorganization is in continuity with the path undertaken at Country Italy level in terms of corporate simplification and adoption of an operating model aimed at improving the services offered to the customer, enhancing the specialization of the various distribution channels, creating competence centers dedicated to interior of Country Italy. In particular, as a result of the merger, the management of the bancassurance relationship relating to the policies intermediated by Banca Generali (BG Vita) will be merged into Alleanza Assicurazioni, to which Alleanza Assicurazioni will continue to guarantee the services. As a result of the operation, Alleanza Assicurazioni will take over the existing contracts with Genertellife customers.
