Generali Group 1 Q 2008 Results

Milan, May 8, 2008

Generali Group 1Q 2008 Results

Assicurazioni Generali Group – 1Q 2008 results

2Agenda

I. Group Financials

II. Final Remarks

III. Backup


3Agenda

I. Group FinancialsProfit & loss review

Shareholders’ equity

Investments

Life & P&C profitability


4

P&C combined ratio (%)

Net result (Euro m)

1,3751,161

Operating result (Euro m)

-15.6%

1Q081Q07

Shareholders’ equity (Euro m)

-0.8%pts

1Q081Q07

715

910

+27.2%

1Q081Q07 1Q08FY07

Key data

93.9 93.1

13.75814.790

-7.0%

I. GROUP FINANCIALS

Note: First consolidation of Ceska Group from 1H 2008.


5Revenues development by segment

(Euro m)

1Q 2007

1Q 2008

∆(3)

(%)∆ like for like(4)

(%)

Life Annual Premium Equivalent 1,127.1 1,364.8 +21.1 +17.0

I. GROUP FINANCIALS

(3) 1Q 2008 includes 51% of APE produced by Generali PPF Holding(4) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena, inclusion of Central Kranken and effects of Generali PPF deal)

(Euro m)

1Q 2007

1Q 2008

∆(%)

∆ like for like(1)

(%)

Gross written premiums 18,480.7 18,429.2 -0.3

-0.2

-0.3

+0.8

Life(2) 12,087.9 12,058.0 -0.3

P&C 6,392.8 6,371.2 +2.8

(1) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena) (2) Including investment contracts for Euro 410.3 m in 1Q 2008 and Euro 306.3 m in 1Q 2007


6

1,161.2

-18.0

-71.2

88.0

583.9

578.5

1,375.0

-38.9

-68.1

112.1

548.7

821.2

+53.7Consolidation adjustments

-15.6Total operating result

-21.5Financial services operating result

+6.4(1)P&Coperating result

-4.6Operating holdingexpenses

-29.6Life operating result

1Q081Q07

%

Operating result by segment (Euro m)

Operating result by segmentI. GROUP FINANCIALS

(1) +9.8% considering the divestiture of Nuova Tirrena


7From operating result to net result

(Euro m) 1Q07 1Q08 %

Total operating result(1) 1,375.0 1,161.2 -15.6

Non operating investment income(2) 112.6 341.3

Non-operating holding expenses (154.9) (171.8)

Interest expenses on financial debt (151.0) (166.3)

Other non-operating holding expenses (3.9) (5.5)

Total non operating result (77.7) 148.3

Consolidated result of the period before taxes and minority interests

1,297.4 1,309.4 +0.9

Minority interests (144.1) (84.2)

Income taxes (437.9) (314.9)

Net other non operating expenses(3) (35.3) (21.3)

Net result of the period 715.4 910.3 +27.2(1) The operating result of Germany and Austria is not adjusted for estimated income taxes attributable to the policyholders(2) P&C net realised and unrealised gains on investments + life and financial services net realised and unrealised gains on strategic investments, net of policyholders’ share(3) Restructuring charges and other non-recurring income and expenses

I. GROUP FINANCIALS


8

13,758

14,790

(1,777)

910

(165)

IFRS Shareholders’ equity roll forward

(Euro m)

Shareholders’ Equity FY07

Change in AFS reserve

1Q 2008Net Result

Other Shareholders’ Equity 1Q08

-7.0%

I. GROUP FINANCIALS


9

297.1

47.3

58.1

285.9

50.7

61.4

20.5398.0

Assets Under Management

Fixed incomeinstruments (3)

76.8% Other (4)

7.0%

Real Estate (5)

4.6%

Equity11.6%

(1) “Own Investments” exclude real estate for own use. With this asset class “Own Investments” would amount to € 300.0 bln, compared to € 288.7 bln at the end of 2007

Unit Linked

Third partiesAUM

“OwnInvestments” (1)

(5) Including real estate mutual funds

FY07 1Q08

(Euro bln)

423.0

+6.3%

I. GROUP FINANCIALS

(4) Including investments in subsidiaries, associated companies and JVs, derivatives, receivables from banks or customers

(2) Banca del Gottardo third parties AUM

(2)

(3) Including mortgage loans, policy loans, deposits under reinsurance business accepted, term deposits with credit institutions and other financial investments, other loans; these items represented 7.7% of own investments in 1Q 2008 and 7.1% of own investments in FY 2007


10Life & Health: New Business Annual Premium Equivalent

Strong growth rates in APE confirm our commitment to value creation

I. GROUP FINANCIALS

1Q 2007 1Q 2008(2)

%Like for like(3)

%

Italy 344.1 333.5 -3.1

France 327.0 354.8 +8.5 +8.5

Germany 194.5 369.3 +89.9 +66.6

+23.5

+7.6

+21.1

-2.7

+17.8

+14.4

+17.0

RoE 162.7 200.9

RoW 98.8 106.2

Total 1,127.1 1,364.8

Italy: reduction of single premiums related to corporate business and bancassurance offset by strong growth of annual premiums (+23%). APE generated by proprietary networks(1) grew about 34%.

France: despite slowdown of unit-linked production and Internet distribution channel (due to weak financial markets), good growth of APE thanks to multi-channel strategy

Germany: excellent increase of APE (+67% neutralising the inclusion of Central Kranken), driven by strong “Riester” production (excluding the impact of the “Riester-step”, APE increased by 11%)

(Euro m)

(1) Agents, financial advisors and salaried workforce(2) 1Q 2008 includes 51% of APE produced by Generali PPF Holding(3) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena, inclusion of Central Kranken and effects of Generali PPF deal)


11

578.5

821.2

Life operating result and net technical reserves

Life operating result (Euro m)

1Q081Q07

-29.6%

I. GROUP FINANCIALS

Life Operating result by market (Euro m)

(Euro m) FY 2007 1Q 2008 %

Life Net Tech. Reserves(2) 281,172.6 281,352.7

233,675.847,676.9

+0.1

traditional 230,388.1 +1.4

linked 50.784.5 -6.1(2) Including investment contracts

1Q 2007 1Q 2008%

Italy 370.9 293.0 -21.0

-7.1

Germany 83.1 73.5 -11.6

CEE 8.0 8.4 +5.0

+28.2

-92.1

-29.6

France 179.2 166.5

Spain 19.1 24.5

RoW(1) 161.0 12.7

Total 821.2 578.5

(1) Including all countries not listed above


12P&C Gross Written Premiums

Growth continues despite a challenging environment

I. GROUP FINANCIALS

1Q 2007

1Q 2008 %

Like for like(1)

%

Italy 1,976.7 1,800.0 -8.9

France 1,113.4 1,147.0 +3.0 +3.1

CEE 253.6 308.2 +21.5 +21.2

-0.2

+4.9

+3.7

-0.3

Germany 1,332.2 1,329.7

+0.2

-0.2

+4.9

+5.0

Spain 482.6 506.1

+2.8

RoW(2) 1,234.2 1,280.2

Total 6,392.8 6,371.2

Italy: weak growth in motor (-1.4%) in a context of decreasing new car sales, also due to cancellation of non profitable fleet contracts; positive development of non motor retail lines (+1.5%)

France: good growth in non motor (+5.3%) pushed by Accident & Health (+6.0%); stable motor premiums (-0.1%)

Germany: good growth in all non motor lines (overall +1.7%); weak growth in motor (-1.9%) due to strong price competition

(1) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena)(2) Including all countries not listed above

(Euro m)


13P&C profitability – net combined ratio

(1.0)0.2

1Q081Q07

Combined ratio (%)

Expense ratio

Loss ratio

-0.8 pts.

I. GROUP FINANCIALS

Combined ratio by country (%)

1Q 2007 1Q 2008 %pts

Italy(1) 91.5 91.0 -0.5

France 96.3 95.8 -0.5

RoW(2) 96.5 94.7 -1.8

-1.7

-1.8

-0.4

-0.8

Germany 97.4 95.7

Spain 86.5 84.7

CEE 95.3 94.9

Total 93.9 93.1

(1) Excluding foreign branches(2) Including all countries not listed above

27.1

66.0

26.9

67.0

93.193.9

Loss ratio Expense ratio


14

549 584

P&C profitability – operating result

P&C operating result (Euro m)

1Q081Q07

+9.8%(1)

I. GROUP FINANCIALS

P&C Operating result by market (Euro m)

1Q 2007 1Q 2008 %Italy 150.8 189.0 +25.3

France 73.8 96.1 +30.1

CEE 21.0 21.4 +1.7

+42.7

+5.8

-35.3

+6.4

Germany 62.0 88.5

Spain 80.4 85.0

RoW(2) 160.6 103.9

Total 548.7 583.9

(2) Including all countries not listed above(1) Calculated considering the divestiture of Nuova Tirrena


15

II. Final Remarks

Agenda


16Conclusion

Solid premium & profit growth in P&C

Resilient life profitability despite unfavourable financial markets

Ongoing actions to further improve efficiency

II. FINAL REMARKS

Generali’s industrial strategy proved right


17Agenda

III. Backup


18Total gross written premiums

(Euro m) Total Gross Written Premiums

Country GWPYoY

increase % weight

(2)

Italy 5,432 -13.3 29.5

Germany 4,174 3.7 22.7

France 4,573 8.9 24.8

Spain 834 0.1 4.5

Eastern Europe 471 21.9 2.6

Rest of Europe 1,989 13.0 10.8

Far East 113 32.7 0.6

South America 366 24.1 2.0

Rest of World 477 8.7 2.5

Total 18,429 0.8 100.0

Gross Life Written Premiums(1)

65.4-0.312,058

2.012.7380

1.027.9175

0.536.094

5.524.61,015

0.923.3163

1.8-6.4328

18.611.03,426

15.45.62,845

19.7-18.83,632

(2)

% weightYoY

increaseGWP

Gross P&C Written Premiums

34.62.86,371

0.5-4.897

1.020.9191

0.117.218

5.32.9974

1.721.2308

2.74.9506

6.23.11,147

7.2-0.21,330

9.80.21,800

(2)

% weightYoY

increaseGWP

(2) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena) (1) Including investment contracts

III. BACK UP


19Life premiums by country & business line

Life 1Q08(Euro m)

TraditionalUnit/index

linked Health GroupInvestment

contracts Total

Italy 78.9% 10.2% 0.0% 8.4% 2.4%

0.1%

0.5%

0.0%

0.0%

11.1%

Eastern Europe 27.7% 39.9% 3.2% 5.9% 23.2% 162.8

46.4%

0.0%

3.5%

3,602.8

Germany 47.2% 26.8% 18.9% 7.1% 2,843.9

France 71.3% 15.8% 5.9% 6.6% 3,376.4

Spain 42.5% 1.6% 0.0% 55.9% 327.7

Austria 49.5% 32.2% 18.3% 0.0% 284.7

Switzerland 23.2% 64.0% 1.2% 0.5% 197.7

Other Europe 22.6% 5.3% 1.1% 24.6% 529.4

Rest of World 27.5% 11.3% 9.8% 51.3% 533.0

Total life gross direct premiums

61.0% 17.2% 7.2% 11.2% 11,858.4

III. BACK UP


20P&C premiums by country & business line

P&C 1Q08(Euro m)

Motor(1)Accident/

HealthOther

personal Commercial Total

Italy 48.2% 18.3% 11.4% 22.1%

9.4%

25.4%

40.9%

19.8%

0.4%

Eastern Europe 57.9% 6.7% 14.1% 21.3% 307.0

34.5%

30.8%

21.1%

1,782.4

Germany 51.1% 9.3% 30.3% 1,327.1

France 30.3% 10.8% 33.5% 1,082.5

Spain 30.5% 13.8% 14.8% 504.8

Austria 45.5% 8.3% 26.4% 455.1

Switzerland 60.6% 23.4% 15.7% 280.9

Other Europe 39.6% 12.4% 13.5% 206.9

Rest of World 57.8% 6.7% 4.6% 300.8

Total P&C gross direct premiums

45.3% 12.9% 20.7% 6,247.5

III. BACK UP

(1) Personal and commercial


21Life & Health: New Business Annual Premium Equivalent

1Q 2007 1Q 2008(1)

%Like for like(2)

%

Italy 344.1 333.5 -3.1

France 327.0 354.8 +8.5 +8.5

Germany 194.5 369.3 +89.9 +66.6

Spain 31.4 33.8 +7.6 +7.6

CEE 31.9 49.4 +54.9 +34.3

+23.5

+7.6

+21.1

RoEof which:

162.7 200.9

-2.7

+17.8

+14.4

+17.0

RoW 98.8 106.2

Total 1,127.1 1,364.8

(Euro m)

(1) 1Q 2008 includes 51% of APE produced by Generali PPF Holding(2) Calculated considering equivalent exchange rates and scope of consolidation (divestiture of Nuova Tirrena, inclusion of Central Kranken and effects of Generali PPF deal)

III. BACK UP


22

Loss ratio

Expenseratio

Life – Expense ratio (%) P&C – Combined ratio (%)

Total – Expense ratio (%)

66.067.0

26.9 27.1

14.6 15.8

9.7 11.3

1Q081Q07

93.9 93.1

1Q081Q07

1Q081Q07

RatiosIII. BACK UP


23Ratios by country

P&C ratios by country (%)

ITA GER SPA AUT SWI CEE Consolidated

Loss ratio

Expense ratio

Combined ratio

Life expense ratios by country (%)

1Q08 9.2 17.3 6.8 4.4 15.0 22.9 26.2 11.3

1Q07 7.3 15.1 6.0 4.9 17.5 18.5 22.9 9.7

66.0

67.0

27.1

26.9

93.1

93.9

63.6

66.6

31.3

28.7

94.9

95.3

71.7

74.0

23.8

22.7

95.5

96.7

68.2

65.1

31.4

31.8

99.6

96.9

61.7

63.9

23.0

22.6

84.7

86.5

1Q08 69.2

1Q07 70.4

21.8

21.0

91.0

91.5

1Q08 29.8 26.3

1Q07 29.6 26.6

1Q08 95.7 95.8

1Q07 97.4 96.3

FRA

65.9 69.4

67.7 69.6

III. BACK UP

(1)

(1)

(1) 1Q07 combined ratio components recalculated in order to reflect a more correct allocation of expenses


24Combined ratio reconciliation

1Q 2007 1Q 2008A Net earned premiums (net of consolidation adjustments) 4,714.6 4,780.0

3,158.0

990.7

301.3

21.1

280.2

1,270.9

67.0%

26.9%

93.9%

B Consolidated net claims 3,156.8

Consolidated acquisition costs 1,011.7

Consolidated administration costs 303.8

Non insurance activity related administration costs(1) 22.3

Insurance activity related consolidated administration costs 281.5

C Total acquisition and administration costs 1,293.2

B/A Loss ratio 66.0%

C/A Expense ratio 27.1%

(B+C)/A Combined ratio 93.1%(1) Administration expenses related to service companies, real estate and other companies not belonging to P&C segment

(Euro m)

III. BACK UP


25Operating result by country

P&C operating result by market (Euro m)Life operating result by market (Euro m)

1Q07 1Q08 %

Italy 370.9 293.0

166.5

Germany 83.1 73.5 -11.6

Spain 19.1 24.5 +28.2

Switzerland 27.9 3.0 -89.2

0.6

8.4

9.1

578.5

-21.0

France 179.2 -7.1

Austria 32.4 -98.1

CEE 8.0 +5.0

RoW 100.7 -91.0

Total 821.2 -29.6

1Q07 1Q08 %

Italy 150.8 189.0

96.1

88.5

Spain 80.4 85.0 +5.8

Switzerland 11.7 19.4 +65.8

13.9

21.4

70.6

583.9

+25.3

France 73.8 +30.1

Germany 62.0 +42.7

Austria 8.5 +63.5

CEE 21.0 +1.7

RoW 140.4 -49.7

Total 548.7 +6.4

III. BACK UP


26Reclassified P&L account

(Euro m) Total1Q 2007 1Q 2008

Operating result(1) 1,375.016,303.2

-16,581.0-2,543.5

135.64,254.3

-68.1-125.5-77.7112.6

Non-operating holding expenses -154.9 -171.8-151.0

-3.9

-35.31,297.4-437.9859.5

-144.1715.4

1,161.2Net earned premiums 16,257.1Net insurance benefits and claims -11,436.1Acquisition and administration costs -2,787.5Net fee and commission income and net income from financial service activities 184.8Operating income from investments -776.1Operating holding expenses -71.2Net other operating expenses -209.8

Non-operating result(1) 148.3Non-operating income from investments(2) 341.3

Interest expenses on financial debt -166.3

Other non-operating holding expenses -5.5

Net other non-operating expenses -21.3Earnings before taxes 1,309.4Income taxes -314.9Consolidated result of the period 994.5Result of the period attributable to minority interests -84.2Result of the period 910.3

(1) 1Q07 figures recalculated gross of unallocated holding expenses. The operating result of Germany and Austria is not adjusted for estimated income taxes attributable to the policyholders(2) P&C net realized and unrealized gains on investments + life and financial services net realized and unrealized gains on strategic investments, net of policyholders’ share

III. BACK UP


27

(Euro m) Life Non life Financial

Unallocated holding

expensesConsolidation

adjustments Total

-68.1

-

-

-

-

-

-68.1

-

-154.9

-

-154.9

-

-38.9

-223.0

-

1,375.0

16,303.2

-16,581.0

-2,543.5

135.6

4,254.3

Operating holding expenses - - - - -68.1

Non-operating holding expenses - - - - -154.9

-125.5

-77.7

112.6

-35.3

-

-

-15.3

-19.0

-4.4

-10.7

-10.6

-

1,297.4-49.5

112.1

0.0

0.0

-114.6

147.6

78.9

0.1

-0.7

0.0

-0.7

111.4

Operating result(1) 821.2 548.7

Net earned premiums 11,588.6

-13,423.0

-1,136.9

3.3

3,753.1

36.1

7.3

16.6

-9.3

828.5

4,714.6

Net insurance benefits and claims -3,158.0

Acquisition and administration costs -1,292.0

Net fee and commission income and net income from financial service activities 0.0

Operating income from investments 441.3

Net other operating expenses -157.3

Non-operating result(1) 81.3

Non-operating income from investments(2) 106.6

Net other non-operating expenses -25.3

Earnings before taxes 630.0

Reclassified P&L account by segment – 1Q 2007III. BACK UP

(1) 1Q07 figures recalculated gross of unallocated holding expenses. The operating result of Germany and Austria is not adjusted for estimated income taxes attributable to the policyholders(2) P&C net realized and unrealized gains on investments + life and financial services net realized and unrealized gains on strategic investments, net of policyholders’ share


28

(Euro m) Life Non life Financial

Unallocated holding

expensesConsolidation

adjustments Total

-71.2

-

-

-

-

-

-71.2

-

-171.8

-

-171.8

-

-18.0

-243.0

-

1,161.2

16,257.1

-11,436.1

-2,787.5

184.8

-776.1

Operating holding expenses - - - - -71.2

Non-operating holding expenses - - - 0.0 -171.8

-209.8

148.3

341.3

-21.3

0.1

0.1

-11.9

3.6

-9.7

0.0

0.0

0.0

1,309.4-18.0

88.0

0.0

0.0

-157.9

172.9

89.4

-16.4

-1.2

7.8

-8.9

86.8

Operating result(1) 578.5 583.9

Net earned premiums 11,477.1

-8,279.4

-1,314.1

23.8

-1,234.5

-94.5

-8.2

1.1

-9.3

570.2

4,780.0

Net insurance benefits and claims -3,156.8

Acquisition and administration costs -1,315.6

Net fee and commission income and net income from financial service activities 0.0

Operating income from investments 365.4

Net other operating expenses -89.2

Non-operating result(1) 329.5

Non-operating income from investments(2) 332.5

Net other non-operating expenses -3.0

Earnings before taxes 913.4

III. BACK UP

(1) The operating result of Germany and Austria was not adjusted for estimated income taxes attributable to the policyholders(2) P&C net realized and unrealized gains on investments + life and financial services net realized and unrealized gains on strategic investments, net of policyholders’ share

Reclassified P&L account by segment – 1Q 2008


29Investments

(Euro m) FY07 % on total 1Q08 % on total3.5 3.5

1.7

20.1

0.3

Available for sale 180,933 53.8 179,284 52.1

22.3

100.0

0.8

18.2

0.3

23.4

100.0

Real Estate(1) 11,907 12,128

Group Participations 2,736 5,991

Loans 61,371 69,088

Held to maturity 1,148 1,080

Fin. Instr. at fair value thr. P&L 78,522 76,810

Total investments 336,617 344,381(1) Excluding real estate mutual funds

III. BACK UP


30Investor Relations team

Paola Buratti – Head of Investor Relations(Tel.: +39-040-671157)

Email: [email protected]

Stefano Burrino (Tel.: +39-040-671202)


Emanuele Marciante (Tel.: +39-040-671347)


Veronica Cherini (Tel.: +39-040-671488)


Assicurazioni Generali P.za Duca degli Abruzzi 2 34132 Trieste, Italy

Website: www.generali.com

Tel.: +39 040 671402 Fax: +39 040 671338 e-mail: [email protected]


31Disclaimer

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 SpA 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 responsible for the preparation of the company’s financial reports, Benoît Jaspar, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Financial Intermediation, that, on the basis of the information available to him by virtue of his position, the accounting information (IAS 1, paragraph 8) contained in thispresentation corresponds to internal documentation, accounting books and accounting records.

Milan, May 8, 2008

Generali Group 1Q 2008 Results

Generali Group 1 Q 2008 Results

Economy & Finance

Transcript of Generali Group 1 Q 2008 Results