Financial performance still under pressure due to the market situation but technical results of the Life and Non-Life segments and solid operating profitability. This is the balance sheet of the group Generali which this morning released the data on first six months of the year. The insurance company ended the period with a net profit of 1,2 billion (-9,9% on the same period of 2015) e operating result at 2,5 billion (-10,5%) "for higher write-downs and lower realized profits resulting from a management policy in line with the strategy of preserving future profitability in the presence of the current adverse conditions of the financial markets".
I overall prizes they stood at 37 billion (-2,1% on the same period of 2015): Non-Life grew (+1,3%), Life segment (-3,5%) still affected by the volatility of the stock markets. Non-Life premiums show a recovery thanks to the performance of the Auto sector; Life was down, reflecting the current situation on the financial markets and the comparison with a particularly favorable first half of 2015. Growing the technical performance of both segments: in Non-Life the combined ratio improved to 92,3% (-0,3 pp) and in Life the technical margin, net of insurance management expenses, increased by 49%. Operating profitability remained at high levels with an annualized operating RoE of 12,9%.
In the note on the accounts, the group indicates that "despite the aforementioned improvement in both life and non-life technical performances", the decline in operating profit "derives from the financial performance which was affected by the current context of low interest rates, by the higher write-downs made in the second quarter due to the performance of the stock markets and by the application of a prudent policy which provides for a lower contribution from realized profits . This policy, concentrated above all in the bond segment, is aimed at supporting the future returns of its investments, in the face of the continuation of the adverse conditions on the stock markets in the first half of 2016, compared to the favorable trend in 2015. The decline in the operating result also weighs contraction of the Holding and other activities segment which reflects the lower contribution of Banca Generali's financial management motivated by the negative trend of the markets, by lower net realized profits in the real estate and private equity sectors.".
Il Regulatory Solvency Ratio (which represents the regulatory view of the Group's capital and considers the use of the internal model only for companies for which approval from IVASS has been obtained and for the remaining companies the application of the Standard Formula) stands at 161% . L'Economic Solvency Ratio of the Group (which represents the economic vision of the Group's capital and is calculated by applying the internal model to the entire perimeter) is equal to 188%. A solid recurring generation of capital, the group explained, has made it possible to maintain solvency at an excellent level and to partially offset the negative impact of the adverse economic context.
“The results of the technical performance of our business in the first six months are solid and encouraging, despite extremely adverse market conditions – explained the Generali group CEO, Philippe Donnet – Our high technical skills and management skills allow us to effectively deal with a period characterized by strong market volatility, low interest rates and the persistence of catastrophic events. In Life, in terms of production, we have followed the path of discipline, favoring quality and profitability, and not just growth in volumes. The increase in Non-Life premiums was significant, taking into account the highly competitive context in which we operate, and will allow us to progressively rebalance the portfolio towards this segment, in which we demonstrate excellent levels of profitability. These results and the work of all our collaborators around the world allow us to maintain our commitment to offer our shareholders a remuneration in line with the plan targets".
At the opening the stock market share of Generali gains 4,5%, to 11,48 euros per share, scoring the best increase in the Ftse Mib.
