CFO Final remarks
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Venice, November 26, 2010 Generali Investor Day 2010 Final Remarks Raffaele Agrusti General Manager & Chief Financial Officer
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Transcript of CFO Final remarks
Venice, November 26, 2010
Generali Investor Day 2010
Final Remarks
Raffaele Agrusti General Manager & Chief Financial Officer
Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets
Disclaimer
Certain of the statements contained herein are statements of future expectations and other forward-looking statements.
These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties.
The user of such information should recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions.
Neither Assicurazioni Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document.
The manager in charge of preparing the company’s financial reports, Raffaele Agrusti, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Financial Intermediation, that the accounting information contained in this presentation corresponds to document results, books and accounts records.
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Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets
Our Solvency II strategy
Main issues Generali response
Capital
management
Capital position under SII (AA calibrated internal capital model) stronger than under SI
Investment
management
Life: Competitive advantage in asset allocation due to our Life VIF
P&C: Optimisation of risk / return profile
Product
design
Focus on Traditional & Unit Linked products with lower capital absorption
V. FINAL REMARKS
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Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets
Inforce managementManagement of asset mix and of the duration gap also via macro hedge
New business managementTraditional productsStill attractive both for policyholder and shareholder thanks to book accounting. In case of efficient volatility absorbers (i.e Policyholder Funds) not available, products will have at maturity guarantee and/or guarantee reduction
Single premiumsAllow good ALM procedureAnnual premiumsHave to evolve towards products where the minimum guarantee of subsequent premiums is linked to a swap based benchmark and fixed year by year
Mark to market productsIn addition on Unit Linked Business we want to offer evolution of CPPI, efficient in SII, and simple Variable Annuities, hedging always the most relevant market risks
Risk based, volatile according to market environment
Volume based
Products in Solvency II world
Solvency IISolvency I
Solvency position volatility driven by the existing business and future new products
V. FINAL REMARKS
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Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets
Generali on new life production
We evaluate new life products across 5 dimensions:
(1) Required capital due to new business production(2) New business premiums(3) P&L cost of investment in life new business
Margins on APE
Italy France Germany
28.5% 10.3% 17.7%
Total CEE RoE RoW
21.7% 39.1% 23.3% 28.2%
IRRItaly France Germany
13.7% 10.5% 18.7%
Total CEE RoE RoW
13.1% 15.1% 11.9% 15.0%
Payback Period (years)
Italy France Germany
7 8 6
Total CEE RoE RoW
7 6 7 7
P&L Strain(3) /
NBP(2)
Italy France Germany
5.8% 1.6% 1.1%
Total CEE RoE RoW
3.7% 23.3% 4.5% 5.7%
V. FINAL REMARKS
Profitability
Capital Strain(1) /
NBP(2)
Italy France Germany
2.3% 2.3% 2.2%
Total CEE RoE RoW
2.5% 1.9% 2.1% 8.4%
Capital remuneration
Payback period1st Year P&L impact
Riskiness / Capital Absorption
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Assicurazioni Generali Group – Investor Day 2010 – Investment Management of Insurance Assets
A strong capital position plus continued optimisation to enhance return on risk capital
Final remarks
Prudent asset and capital management made us resilient through the crisis
Tight risk control allows Generali to face a persistently challenging environment
Good returns and benefits from diversification through real estate
Product strategy preserves profitability of traditional products under SII
V. FINAL REMARKS
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Venice, November 26, 2010
Generali Investor Day 2010
Final Remarks
Raffaele Agrusti General Manager & Chief Financial Officer
