Generali Group 1Q 2010 results

Milan, May 12, 2010

Generali Group 1Q 2010 Results

Assicurazioni Generali Group – 1Q 2010 results

2Agenda

I. Overview

II. Group financials

III. Final remarks

IV. Backup


3Agenda

I. Overview1Q 2010 results at a glance


4

Life net inflows (Euro m) Operating result

(Euro m)

1Q 2010 results

at a glance

1,2011,009

3,184

6,111

(2) Excluding Intesa

Vita, according to IFRS 5 treatment for discontinued operations.

On historical terms, the variations would be +19.1%

+22.0%(2)+90.0%(1)

(1) On like for like basis

I. OVERVIEW

1Q09 1Q10 1Q09 1Q10

104

527

+407.7%

1Q09 1Q10

Net result (Euro m)

16,65218,002

+8.1%

FY09 1Q10

Shareholders’

equity (Euro bn)


5Agenda

II. Group financialsProfit & loss review

Shareholders’

equity

Life & P&C profitability


6Revenue

development

by

segmentII. GROUP FINANCIALS

(Euro m)1Q

20091Q

2010∆

historical(%)

∆

like for like (%)

Gross written premiums 18,479 20,864 +12.9 +16.2

Life(1) 11,889 14,214 +19.6 +25.7

P&C 6,590 6,650 +0.9 +0.0

APE(2) 1,196 1,532 +28.1 +21.3

(1) Including investment contracts for Euro 1,274.0 m in 1Q10(2) APE amounts are calculated with end of period perimeter and exchange rates –

like for like variations neutralize impacts of variations of perimeter and exchange rates


7

Consolidation adjustments

Total operating result

Financial services operating result

P&C

operating result

Operating holdingexpenses

Life operating result

1Q10

1,201

-31

-67

98

335

866

1,009

-33

-63

92

449

563

+5.2

+22.0

+6.4

-25.4

-7.0

+60.8

1Q09

(%)

Operating result by segment (Euro m)

Operating result by segmentII. GROUP FINANCIALS

(1)

(1) Excluding Intesa

Vita in 1Q09 and 1Q10, according to IFRS 5 treatment for discontinued operations.

On historical terms, the variations would be +53.8% for the life operating result and +19.1% for the consolidated operating result


8Focus on operating result

(Euro m)

1Q09 1Q10 ∆

%

Italy 398 472 +26.1(2)

France 155 199 +28.8

Germany 128 162 +26.9

CEE 204 158 -22.7

RoE 188 190 +1.4

RoW 31 118 +275.0

Operating

result(1) 1,104 1,299 +20.3(2)

Op. holding expenses 63 67 -7.0

Consolidation Adj. 33 31 +5.2

Total operating

result

1,009 1,201 +22.0(2)

II. GROUP FINANCIALS

Operating result by country(1)

350

130 12959

111 88

89

6821

9444

19

33

5 3611

122

Italy France Germany CEE RoE RoW

Life P&C Financial

Operating result breakdown(1)

(Euro m)

(1)

Operating

result

= operating

result

of

life, P&C

and financial

segments, before

holding expenses

and consolidation

adjustments(2)

On like

for

like

basis


9From operating result to net resultII. GROUP FINANCIALS

(Euro m) 1Q09 1Q10 (%)

Total operating result 1,009 1,201 +22.0(1)

Non operating investment income (522) 2

Non-operating holding expenses(2) (172) (193)

Net other non operating expenses (94) (105)

Total non operating result (788) (296) +62.4

Consolidated result of the period before taxes and minority interests

221 905 +309.3

Income taxes (62) (295)

Result from discontinued operations (Intesa Vita) - 15

Minority interests (55) (99)

Net result of the period 104 527 +407.7(1) Excluding Intesa

Vita in 1Q09 and 1Q10, according to IFRS 5 treatment for discontinued operations. On historical terms, the variation would be +19.1%(2) Including interest expenses on financial debt


10

18,00216,652

42

(25)

294527512

IFRS Shareholders’

equity roll forward

Shareholders’

Equity FY09

Δ

in AFS Reserve

1Q 2010Net Result

Δ

Currency

Translation

Reserve

Δ

Cash Flow Hedge Reserve

Other Shareholders’

Equity 1Q10

+8.1%


IFRS Shareholders’

equity roll forward (Euro m)

Change in AFS reserve (Euro m)

7305 1,241

94412

AFS Reserve FY09

Impact Equity Investments

Impact Bond Investments

Other AFS Reserve 1Q10


11

16.9

21.6

17.3

22.3

Solvency

I updateII. GROUP FINANCIALS

Required margin Available margin

FY09

128%

(Euro bn)

1Q10(1)

129%

Solvency I ratio

(1) Estimated figures


12

319.4

45.0

309.5

42.5

89.083.6

Investments(1)

435.6

Fixed

income

instruments

(3)

79.0%

Other

(4)

4.1%

Real Estate

(5)

4.6%

Equity

9.4%

Unit

Linked

Third

parties

AUM

“Own

Investments”

(2)

FY09 1Q10

(Euro bn)

453.4+4.1%


(1) FY09 own investments restated in order to include cash and cash equivalents. The related weights of asset classes are: fixed

income instruments 78.7%, real estate 4.7%, equity 9.0%, cash & cash equivalents 3.4%, other 4.2%

(2) “Own Investments”

exclude real estate for own use. With this asset class “Own Investments”

would amount to €

322.6 bn, compared to €

312.8 bn

at FY09(3) Including

mortgage

loans, policy loans, deposits

under reinsurance

business accepted, term

deposits

with

credit

institutions

and other

financial

investments, other

loans(4) Including

investments

in subsidiaries, associated

companies

and JVs, derivatives, receivables

from

banks

or customers

(5) Including real estate mutual funds

Cash & equival. 2.8%

EXPOSURE TO PERIPHERAL EUROPE

GOVERNMENT BONDS

(Euro bn) Gross Net

Portugal 3.98 0.67

Spain 4.16 0.80

Ireland 1.79 0.28

Greece 4.08 0.81

Total 14.01 2.57


13Life New Business Annual Premium Equivalent

Best first quarter ever for the Group, with APE exceeding 1.5 Euro bn

Excellent growth of APE from 1Q2009 to 1Q2010 (+21.3% on a like for like basis), driven by the strong contribution of single premiums and the recovery of unit linked business


(Euro m) APE

1Q2009

1Q2010

Historical%

Like for like%

Italy 301 466 +54.7 +34.6

France 329 413 +25.7 +25.7

Germany 278 266 -4.3 -5.2

CEE 37 40 +10.1 -0.5

RoE 135 221 +63.5 +56.6

RoW 116 125 +7.6 -0.4

Total 1,196 1,532 +28.1 +21.3


14Strong growth in life business

1Q 2010 251.0 45.1

FY 2009 243.8 42.6

Δ% +2.9% +5.9%


Life net technical reserves(2)

(Euro m)Life gross written premiums

(Euro bn)

14.211.9

1Q101Q09

Life net inflows by country(1)

(Euro m)

+25.7%(3)

1Q10FY09

286.4 7.2 2.5

Traditional Unit

Linked

Δ

296.1

Country 1Q09 1Q10 Δ%(3)

Italy (420) 883 n. a.

France 1,495 2,298 +53.7

Germany 1,207 1,203 -0.4

CEE 133 129 -8.4

TOTAL 3,184 6,111 +90.0

+3.4%

(2) Including

investment contracts; excluding

Intesa

Vita in FY09 and 1Q10, according to IFRS 5 treatment for discontinued operations(3) On like for like basis

(1) Net inflow: premiums

written

in the period

less

surrenders

and maturity. It

does

not

include revaluation

of

mathematical

reserves

563866

+60.8%(3)

1Q09 1Q10

Life operating result

(Euro m)


15P&C Gross Written PremiumsII. GROUP FINANCIALS

(Euro m) 1Q09 1Q10Historical

%Like

for

like(1)

%

Italy 1,703 1,715 +0.8 +0.8

France 1,164 1,223 +5.1 +5.0

Germany 1,312 1,292 -1.5 -1.5

CEE 565 613 +8.4 -1.6

RoE 1,508 1,489 -1.3 -1.8

RoW 339 319 -6.0 -5.2

Total 6,590 6,650 +0.9 +0.0(1)

Calculated considering equivalent exchange rates and scope of consolidation

First signs of premium recovery in Italy and France

Stable production thanks to geographical diversification

Growth in Retail Non-Motor; Motor and Commercial still under pressure


16P&C profitability

(1/2)

1.40.3

1Q101Q09

Combined ratio (%)

Expense ratio

Loss ratio

+1.7%pts.


Combined ratio by country

(%)

1Q 2009 1Q 2010 %pts

Italy 96.7 97.6 +0.9

France 100.6 99.0 -1.6

Germany 96.5 99.5(1) +3.0

CEE 85.9 87.1 +1.2

RoE 95.9 101.2 +5.3

RoW 95.2 96.6 +1.4

Total 96.3 98.0 +1.7

27.8

70.2

27.5

68.8

98.096.3

Loss

ratio Expense

ratio

(1)

Excluding Nat Cat, the ratio would be 95.7%


17

21.5

6.0

21.9

6.0

P&C profitability

(2/2)II. GROUP FINANCIALS

Loss ratio (%)

1Q101Q09 Δ

Admin Δ

Acq.

Acq. costs

Adm. costs

27.8Expense ratio (%)

Δ%pts

Reserving ratio

(%)(1)

27.5 0.0 0.4

449 335

-25.4%

1Q09 1Q10

P&C operating result

(Euro m)

(1) On three months basis

1Q101Q09

+0.9%pts

508.2 509.1

1Q 2010 2.3 70.2

1Q 2009 0.9 68.8

1Q101Q09

68.8 70.21.4

NatCAT


18Global Added

Value

(GAV)(1)

12,63512,011

14,157


GAV

(Euro m) 2009 GAV breakdown (%)

(1) The Global Added Value (GAV) derives from the reclassification of the consolidated financial statements and expresses the wealth

generated by Group operations over the year for the various stakeholder categories. In practice, GAV is

calculated as the difference between the value of goods and services provided by the company and the value of the goods and services it acquires from third parties

(2) Consolidated result of the period (including minority interests)(3) Total interest expense (including operating debt)

20092007 2008

Employees31.1%

Credit capital

providers(3)

10,0%

Shareholders(2)

13.9%

Agents & FAs40.7%

State4.0%

Community0.3%

+5.2%


19

III. Final Remarks

Agenda


20Final remarks

Non life benefits from repricing

actions and high exposure to retail business

III. FINAL REMARKS

Business model strength confirmed in a challenging environment

Balanced operating result thanks to sound risk geographical diversification

Results confirm the effectiveness of cost saving initiatives

Confirmed focus on preserving current yields and protecting value of investments


21Agenda

IV. Backup


221Q10 total gross written premiums

(Euro m) Total Gross Written Premiums

Country GWP ∆%(2) % weight

(2)

Italy 5,394 +22.6 25.9

France 5,255 +21.7 25.2

Germany 4,450 +2.4 21.3

Eastern Europe 1,013 +0.1 4.9

RoE 3,437 +25.4 16.5

Of which:

Spain 686 -18.6 3.3

Austria 789 +3.1 3.8

Switzerland 548 +4.9 2.6

RoW 1,315 +14.9 6.3

Total 20,864 +16.2 100.0

Gross Life Written Premiums(1)

GWP ∆%(2) % weight

(2)

3,678 +36.4 17.6

4,033 +27.8 19.3

3,158 +4.2 15.1

400 +2.8 1.9

1,948 +58.9 9.3

Of which:

232 -34.9 1.1

322 +11.1 1.5

219 +5.8 1.1

997 +23.1 4.8

14,214 +25.7 68.1

Gross P&C Written Premiums

GWP ∆%(2) % weight

(2)

1,715 +0.8 8.2

1,223 +5.0 5.9

1,292 -1.5 6.2

613 -1.6 2.9

1,489 -1.8 7.1

Of which:

453 -6.5 2.2

468 -1.8 2.2

328 +4.4 1.6

319 -5.2 1.5

6,650 +0.0 31.9

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

IV. BACK UP


23Life Premiums by Country & Business Line

Life 1Q10(Euro m)

TraditionalUnit/index

linked Health Group Total

Italy 88.0% 1.5% 0.0% 10.5% 3,663

France 76.9% 12.7% 5.3% 5.0% 3,985

Germany 46.4% 23.9% 21.1% 8.6% 3,158

CEE 65.9% 22.1% 10.5% 1.5% 400

RoE 24.3% 58.4% 3.4% 13.8% 1,946

Of which:

Spain 54.9% 1.9% 0.0% 43.2% 232

Austria 53.6% 28.8% 17.7% 0.0% 320

Switzerland 20.2% 78.6% 1.0% 0.2% 219

RoW 33.3% 0.4% 10.0% 56.3% 841

Total life gross direct premiums

62.7% 18.2% 7.7% 11.5% 13,993

IV. BACK UP


24P&C Premiums by Country & Business Line

P&C 1Q10(Euro m)

Motor(1)Accident/

Health Personal Commercial Total

Italy 47.8% 17.6% 11.8% 22.8% 1,686

France 28.1% 11.4% 34.6% 26.0% 1,163

Germany 48.8% 9.7% 32.2% 9.4% 1,290

CEE 52.1% 9.5% 13.9% 24.5% 608

RoE 37.2% 17.3% 17.8% 27.6% 1,447

Of which:

Spain 24.0% 17.3% 22.0% 36.7% 438

Austria 38.4% 8.9% 16.6% 36.0% 460

Switzerland 55.5% 27.0% 17.1% 0.3% 327

RoW 61.4% 7.6% 4.5% 26.5% 315

Total P&C gross direct premiums

43.2% 13.6% 21.1% 22.1% 6,509

(1) Including

fleets

IV. BACK UP


25Life New Business APE

(Euro m) New Business APE1Q 2009 1Q 2010 % historical % like

for

like

Italy 301 466 +54.7 +34.6

France 329 413 +25.7 +25.7

Germany 278 266 -4.3 -5.2

CEE 37 40 +10.1 -0.5

RoE 135 221 +63.5 +56.6

of which Spain 36 29 -19.2 -19.2

of which Austria 19 28 +47.9 +18.7

of which Switzerland 20 19 -4.6 -10.0

RoW 116 125 +7.6 -0.4

Total 1,196 1,532 +28.1 +21.3

IV. BACK UP


26

Loss ratio

Expense

ratio

Life –

Expense ratio (%) P&C –

Combined ratio

(%)

Total –

Expense ratio (%)

70.268.8

27.5 27.8

16.0 14.2

11.1 9.3

1Q101Q09

1Q101Q09

1Q101Q09

96.3 98.0

RatiosIV. BACK UP


27Ratios by country

P&C ratios by country (%)

ITA FRA GER CEE SPA AUT SWI Consolidated

Loss ratio

1Q10 75.8 71.9 70.8 57.2 73.1 66.0 71.2 70.2

1Q09 74.8 73.4 67.4 56.0 67.0 67.1 70.1 68.8

Expense ratio

1Q10 21.8 27.1 28.7 30.0 25.9 31.2 22.6 27.8

1Q09 21.9 27.1 29.1 29.8 24.1 31.3 25.0 27.5

Combined

ratio

1Q10 97.6 99.0 99.5(1) 87.1 99.0 97.3 93.8 98.0

1Q09 96.7 100.6 96.5 85.9 91.1 98.4 95.1 96.3

Life expense

ratios

by

country

(%)

1Q10 8.4 5.6 14.3 18.7 5.1 12.3 18.6 9.3

1Q09 10.8(2) 7.1 15.3 20.0 4.3 13.7 20.9 11.1

IV. BACK UP

(1) Excluding Nat Cat, the ratio would be 95.7%(2) Excluding Intesa

Vita. On historical terms, the ratio would be 9.3%


28Combined ratio reconciliation

1Q 2009 1Q 2010A Net earned premiums (net of consolidation adjustments) 5,012.7 5,052.5

B Consolidated net claims 3,449.1 3,544.6

Consolidated acquisition costs 1,076.3 1,104.6

Consolidated administration costs 316.2 315.9

Non insurance activity related administration costs(1) 15.5 14.8

Insurance activity related consolidated administration costs 300.7 301.1

C Total acquisition and administration costs 1,377.0 1,405.7

B/A Loss ratio 68.8% 70.2%

C/A Expense ratio 27.5% 27.8%

(B+C)/A Combined ratio 96.3% 98.0%(1) Administration expenses related to service companies, real estate and other companies not belonging to P&C segment

(Euro m)

IV. BACK UP


29Operating

result

by

country

P&C operating result by market

(Euro m)Life operating result by market

(Euro m)

1Q09 1Q10 %

Italy 273 350 +40.7(1)

France 104 130 +25.2

Germany 50 129 +160.4

CEE 93 59 -37.1

RoE 32 111 +245.6

Of which:

Spain 25 27 +9.7

Austria 5 14 +202.1

Switzerland 13 28 +118.0

RoW 12 88 +645.3

Total 563 866 +60.8(1)

1Q09 1Q10 %

Italy 110 89 -18.7

France 52 68 +31.7

Germany 66 21 -68.1

CEE 107 94 -12.1

RoE 99 44 -55.6

Of which:

Spain 53 24 -55.2

Austria 14 20 +46.6

Switzerland 11 17 +58.5

RoW 15 19 +22.0

Total 449 335 -25.4

IV. BACK UP

(1) On like for like basis. On historical terms, the variations would be 28.2% for the Italian life operating result and +53.8% for the consolidated life operating result


30Reclassified P&L account

(Euro m) Total1Q 2009 1Q 2010

Operating result(1) 1,009 1,201Net earned premiums 16,129 17,800Net insurance benefits and claims (13,217) (18,286)Acquisition and administration costs (2,831) (2,914)Net fee and commission income and net income from financial service activities 150 214Operating income from investments 951 4,560Operating holding expenses (63) (67)Net other operating expenses (110) (106)

Non-operating result(1) (788) (296)Non-operating income from investments (522) 2Non-operating holding expenses (172) (193)

Interest expenses on financial debt (165) (185)

Other non-operating holding expenses (7) (8)

Net other non-operating expenses (94) (105)Earnings before taxes 221 905Income taxes (62) (295)Result from discontinued operations (Intesa Vita) - 15Consolidated result of the period 159 626Result of the period attributable to minority interests (55) (99)Group result of the period 104 527

IV. BACK UP

(1) Refer to the Methodological note on alternative performance measures included in the Consolidated Quarterly Report


31

(Euro m) Life Non life Financial(2)

Unallocated holding

expensesConsolidation

adjustments Total

Operating result(1) 563 449 92 (63) (33) 1,009

Net earned premiums 11,116 5,013 0 - - 16,129

Net insurance benefits and claims (9,768) (3449) 0 - - (13,217)

Acquisition and administration costs (1,281) (1,382) (168) - - (2,831)

Net fee and commission income and net income from financial service activities 8 0 166 - (24) 150

Operating income from investments 533 306 122 - (10) 951

Operating holding expenses - - - (63) - (63)

Net other operating expenses (45) (38) (28) - 1 (110)

Non-operating result(1) (112) (484) (19) (172) - (788)

Non-operating income from investments (82) (440) 0 - - (522)

Non-operating holding expenses - - - (172) - (172)

Net other non-operating expenses (30) (45) (19) - - (94)

Earnings before taxes 451 (36) 74 (235) (33) 221

IV. BACK UP

Reclassified P&L account by segment –

1Q 2009

(1) Refer to the Methodological note on alternative performance measures included in the Consolidated Quarterly Report(2) Not reclassified according to the new layout based on operating margins and presented in the Consolidated Quarterly Report


32

(Euro m) Life Non life Financial(2)

Unallocated holding

expensesConsolidation

adjustments Total

Operating result(1) 866 335 98 (67) (31) 1,201

Net earned premiums 12,748 5,053 0 - - 17,800

Net insurance benefits and claims (14,741) (3,545) 0 - - (18,286)

Acquisition and administration costs (1,297) (1,410) (207) - - (2,914)

Net fee and commission income and net income from financial service activities 29 0 209 - (25) 214

Operating income from investments 4,160 290 116 - (6) 4,560

Operating holding expenses - - - (67) - (67)

Net other operating expenses (34) (53) (20) - - (106)

Non-operating result(1) (17) (73) (14) (193) - (296)

Non-operating income from investments 18 (16) 0 - - 2

Non-operating holding expenses - - - (193) - (193)

Net other non-operating expenses (34) (57) (14) - - (105)

Earnings before taxes 849 262 84 (260) (30) 905

IV. BACK UP

Reclassified P&L account by segment –

1Q 2010

(1) Refer to the Methodological note on alternative performance measures included in the Consolidated Quarterly Report(2) Not reclassified according to the new layout based on operating margins and presented in the Consolidated Quarterly Report


33Total comprehensive

income(1)(2)

(1,031)

1,308

459

(505)

181

(1,010)

(178)

794

1,916

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

(Euro m)

IV. BACK UP

(1)

Total Comprehensive Income = Change in shareholders’

equity during the period related to income and expenses recognized in profit or loss or directly in shareholders’

equity resulting from transactions and events other than transactions with equity owners(2)

According to new definition applied in annual report 2009, some residual change in equity components (FY09: Euro 11 m, FY08: Euro 28 m) were reclassified outside the other comprehensive income as transactions with equity holders. Comparative information was restated accordingly

1Q08 1H08 9M08 FY08 1Q09 1H09 9M09 FY09 1Q10

(1,031) (1,536) (1,354) (2,365) (178) 616 2,532 2,990 1,308

+3,000 m

-3,000 m


34Investor Relations Team

Paola Buratti

(Tel.: +39-040-671157)Head of Investor RelationsEmail: [email protected]

Stefano Burrino

(Tel.: +39-040-671202)Email: [email protected]

Emanuele Marciante


Veronica Cherini


Rodolfo Svara


Nicoletta

Mendes

(Tel.: +39-040-671402)IR EventsEmail: [email protected]

Assicurazioni Generali P.za Duca degli Abruzzi 2

34132 Trieste, Italy

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

www.generali.com


35Disclaimer

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 charged with 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.

Milan, May 12, 2010

Generali Group 1Q 2010 Results

Generali Group 1Q 2010 results

Investor Relations

Transcript of Generali Group 1Q 2010 results