“Re-establish a solid capital position” and “refocus on core insurance business”, giving more weight to the “Non-Life” business. These are the main objectives of Generali, which is presenting its new strategic plan today in London. Once fully operational, the company aims to obtain un Operating Roe at 13%, which is equivalent to a operating profit exceeding 5 billion, against the over 4 billion expected for 2012. Cash flow is expected to exceed $2 billion by 2015, also thanks to cost reduction of 600 million, while in the same period the target for the Solvency I index is above 160%.
The Lion intends to "manage the business with capital and financial leverage adequate to an AA rating" thanks to "the reinvestment of profits - the company said -, selective disposals of non-core assets and other capital management actions". A more disciplined approach “will generate more cash flow from current businesses with a target of over €2 billion by 2015”.
As for the corporate strategy, Generali "will refocus on its core insurance business by optimizing its geographical presence, growth in P&C and greater profitability in Life". The aim is to "improve the return to shareholders and maximize the value of the business", also thanks to greater investments to grow on the markets of Central-Eastern Europe and Asia.
In particular, the 'business mix' will shift "towards a greater contribution" of the "P&C" business through the development of the Accident & Health segment, particularly in emerging markets and the commercial segment. The reinsurance business will also be centralized for better optimization of risk retention at group level and better efficiency in capital management.
“The objective of the strategy we are presenting today is to transform Generali into a global group capable of competing on international markets – said the CEO of Generali, Mario Greco -, offering customers the best products and services. We will have a stronger and more stable capital position and a higher return for shareholders. With the new international management team just completed we will create a revolution based on discipline, simplicity and focus. We have a clear strategy and 83.000 employees worldwide committed to delivering it efficiently."
By 2015, the group expects to increase the weight of the Non-Life operating result to approximately half of the overall operating result (compared to approximately 35% as at 30 September 2012). In the Life segment, the priority will be “to favor business profitability over volumes, while reducing capital absorption”.
As for the new management team, the appointments were completed with the entry of Nikhil Srinivasan, who will be the group's new chief investments officer, and di Carsten Schildknecht, who will step in as chief operating officer effective April 1, 2013. Both appointments will be subject to board approval.
All the other workers in the group can rest assured: "We have 83 employees worldwide and 13 in Italy and we are not planning any significant reduction in the employee base anywhere in the world," Greco assured.
About an hour after the start of trading, Generali shares lost 0,3% in Piazza Affari.
