Il Generali Group closes the 9 months of 2022 with a Net income down slightly by 0,8% to 2,233 billion due to the impact of Russian investments, without which net income would be up by 5,5% to 2,374 billion. The figure is higher than average consensus of 2,049 billion and the range between 1,867 billion and 2,231 billion
Il Operating income grew by Present in several = 7,8% to 4,8 billion, beyond the consensus of a maximum value of 4,672 billion, thanks to the positive development of Life and Non-Life segments.
The Lion of Trieste confirmation the commitment to pursue sustainable growth, improve the earnings profile and drive innovation "Despite an evolving macroeconomic scenario": for the period 2021-2024, a compound annual rate of growth in earnings per share between 6% and 8%, a generation of are expected for the period 2022-2024 net cash flows available at Parent Company level in excess of 8,5 billion and a distribution to shareholders of dividends cumulative in the period 2022-2024 for an amount included between 5,2 and 5,6 billion, with ratchet dividend per share policy. The Generali stock at Piazza Affari opens at 16,64 euros, up 1,93%
Life segment operating result up 23,9%, premium income down
The operating result of the Life segment (+23,9%) and the Non-Life segment (+2,9%) grew. The New Business Margin grew by 0,68 percentage points to 5,42% "thanks to the rise in interest rates," said the note. THE gross premiums in the period they showed an increase of 1,3% to 59,8 billion, thanks to the development of Non-Life (+10,3%), in particular in the non-auto (+12,8%). On the other hand, premiums in the Life business are down by 2,9%.
La net collection Life stands at 7,7 billion, down by -25,3%, due to the "savings line, in line with the Group's portfolio repositioning strategy and with specific in-force management activities" explains a note. Also decreasing unit-linked line, “reflecting the greater uncertainty of the macro-economic context”. The Life technical reserves they amounted to 418,5 billion, down by 1,4% compared to the end of 2021, reflecting the performance of the financial markets. The collection of pure risk and disease lines shows robust growth, the statement said.
On the profitability front, the Combined ratio is at 93,3%, up 2 percentage points, reflecting a higher loss ratio (+1,7 pp) also impacted by the acceleration of theinflation in Argentina. Without considering this country, the Combined Ratio would be 92,5%, up from 91,1% in the first 9 months of 2021.
Solvency Ratio at 223%, down 4,5 points, M&A, regulations, dividends and buybacks weigh
“The results of the first nine months reflect the solidity of our Group based on our strategy focused on the most profitable business lines and on diversified sources of profits” said the CFO of the Generali group, Cristiano Borean. “This allows us to continue to generate value despite the macroeconomic context. Generali is successfully achieving sustainable growth and is steadily increasing its operating result, in line with the effective implementation of our strategic plan 'Lifetime Partner24: Driving Growth'” the statement said.
Il Solvency Ratio (which represents the regulatory view of group capital and is based on the use of the internal model only for companies that have obtained the relative approval from IVASS) is equal to 223%, decreased by 4,5 percentage points compared to the end of 2021. The cause of the decline it can be attributed "mainly to the impacts deriving from the M&A transactions, the regulatory changes in the first quarter as well as the accrual of the dividend for the period and the buyback operation of treasury shares" explains Triestre. “These impacts are only partially offset by the solid contribution of the normalized generation of capital and by the positive market variances (attributable to the increase in interest rates which more than offset the decline in the stock market, the widening of spreads on BTPs and the 'rising volatility and inflation'.
Equity falls to 16,6 billion, the reserve for profits reduced
The shareholders' equity attributable to the Group almost halved to 16,6 billion from 29,3 at the end of 2021: "The change is mainly attributable to the decrease in the reserve for profits attributable to financial assets available for sale for 14 billion deriving 'increase in interest rates and corporate spreads”, explains the company.
Asset and Wealth Management Segment: EBIT grows by 1,7%
- Assets Under Management Group aggregates fell by 12,4% to €621,8 billion compared to the end of 2021, “mainly reflecting the increase in interest rates on fixed-income securities”.
Il Operating income of Asset Management activities rose 459 million (+1,7%), supported by the increase in operating revenue (+3,2%) mainly due to Asian companies and higher non-recurring performance fees recorded in the first quarter.
Il Operating income Group General Bank è dropped by 20,5% to 254 million due to “the performance of the financial markets during the first nine months of 2022, which led to a significant impact on performance fees to 18 million in the first 9 months of 2022 from 196 million a year earlier. Without considering the effect of commissions of performance and the prudential provision of 80 million made in the first half of 2021 to protect customers, the operating result would record significant growth. There net collection overall of General Bank exceeds 4 billion at the end of last September, "confirming a solid trend in terms of volumes in the face of a market context that remains particularly complex".
Non-life rates will increase due to inflation
The group led by Philippe Donnet explained that it will continue with the rebalancing of its Life portfolio to further strengthen profitability and with a more efficient capital allocation logic. "Simplification and innovation will continue to be key, with the introduction of a range of modular product solutions, designed on the specific needs and new needs of the customer, and offered to the market through the most suitable, efficient and modern distribution channels" , the company explained. While in Non-Life, the group's objective in the mature insurance markets in which it operates is to maximize profitable growth, especially in the non-motor line, and to continue to strengthen itself in markets with high growth potential, expanding its presence and offer on the territory. "Given the current context of growing inflation and the increase in claims management costs, the group envisages further rate adjustments, in addition to those already undertaken", they later announced from Trieste.
