The goals are ambitious. In the business plan presented today at Piazza Affari and valid until the end of 2020, Cattolica Assicurazioni has set a target an operating profit that could reach 400 million euros, i.e. growing by 60% compared to 2016, with the distribution of a dividend increasing by 50% at half a euro per share and Premiums growing by 64% up to 8 billion. How does the institute, led for about 8 months by Alberto Minali, plan to join them?
A illustrate the plan, which rests on three pillars – profitable growth, innovation and technical excellence – was the managing director himself, during the Investor Day at Palazzo Mezzanotte: "We are still too cumbersome, the first goal is to become more responsive and faster, transforming the company as we continue to do business”. The guiding star of the business "will always be customer service, in the context of a difficult market: the Auto business is shrinking and the Life business is difficult in times of low interest rates".
The first step, for the third largest Italian insurance company with 3,6 million customers, which its largest shareholder is Warren Buffett's Berkshire Hathaway with a 9% share, is digitization. “We will focus on the multi-channel evolution of the distribution model – explained Carlo Ferraresi, General Manager of Markets and Distribution Channels -, both with customers and internally: our physical networks, the agencies, however will remain predominant”.
In fact, digitization also means diversification, with agencies going from 83 to 68% of the business, leaving more room for bancassurance, which will go from 12 to 22% after the agreement with Banco Bpm (which follows the one with Ubi Banca and Iccrea) which - confirming a business that will remain mainly physical - will bring access to 1.700 branches (in addition to Cattolica's 1.500), for an expected increase in size of 9 billion for the Life reserves of 140 million for Non-Life premiums. Precisely Premiums are another of the great challenges of the new plan: they will have to grow in total by at least 3 billion compared to 2016, with a prevalence of the Life branch (+2,5 billion) compared to the Non-Life branch (+0,5 billion).
“Currently – recalled Minali – we have one of the most loyal customer bases, higher profitability than the market and a lower level of debt. We must be able to evolve without affecting the company's assets. Diversification is important: our business is still too focused on the car, we will grow on Vita and on other things”. However, multi-channel and customer centrality will not make Cattolica an online or low cost insurance company.
“We will never become low cost, but more efficient”, added Minali, also claiming the results already achieved in the first six months at the helm of the company: “So far we haven't been to clean the jaguar, as some would say. Nineteen functional areas are already being reorganised, we have reduced the exposure to Italian government bonds by more than 5,5 percentage points, and then there is the agreement with Banco Bpm, which is the third largest bank in Italy in terms of branches”.
Without forgetting the resolution of the Board, which took place just on the eve of the Investor Day, which gave way to a new governance model. “The Assembly is and will remain sovereign”, clarified the managing director, explaining that a one-tier system will be adopted, in order to enhance the functions of the board by making the corporate machine leaner: the board will therefore have fewer representatives and the executive committee will be abolished. Furthermore, the shareholding threshold is confirmed at 0,5% for natural persons but raised to 5% for legal entities: therefore openness to the market and institutional investors.
"However, the cooperative model and the per capita vote are confirmed," explained Minali. The board, for the occasion, also has confirmed Marco Cardinaletti as managing director of Tua Assicurazioni, the wholly owned subsidiary of Cattolica. However, Cardinaletti leaves the position of General Manager of Cattolica. Finally, the restyling of the company also passes through the new portal, which is also more flexible and oriented towards customer needs, through a separate homepage dedicated to users, different from the corporate one: both can be found at www.cattolica.it.
The plan is currently convincing investors: at the end of the morning, in a session which up to that moment was slightly negative for the Ftse Mib index, the Cattolica Assicurazioni share navigated in positive territory, firmly above 10 euros per share.
