Generali Group 2010 first half results

March 2006

Generali Group

2010 First-Half Results

Milan, March xxx, 2010August 5, 2010

Assicurazioni Generali Group – 1H 2010 results

2Agenda

IV. Backup

III. Group Financials

Raffaele Agrusti - CFO

II. Insurance operations

Sergio Balbinot - Managing Director

I. 1H 2010 results overview

Giovanni Perissinotto - Group CEO

Page 3

Page 8

Page 12

Page 34


3Agenda

I. 1H 2010 results overview

Giovanni Perissinotto - Group CEO


4

!Recovery still weak

Financial markets very volatile

Corporate/Sovereign risks force more careful allocation

Banks/States to cope with heavy debt exposures

Economic and financial framework

Euro dynamics favours exporters

Global demand driven by Emerging Markets

Proactive Government Policies – No Sovereign breakdown

Savings and Competitive focus on the rise

Insurance: strong life recovery; expected gradual P&C

improvement

I. 1H 2010 RESULTS OVERVIEW


5

16,65217,146

Update on financial strength

Shareholders’ Equity (Euro m) Solvency Margin (%)

FY09 1H10

+3.0%

140%

161%

187%

142%

FY09

Economic Solvency calibrated on AA rating

Solvency I

1H10


(1)

(1) Including off balance sheet unrealized gains on real estate, 8%pts of which

subject to authorities’ authorization


6

1,201

1,0122,213

1,009

925 1,934

Net result (Euro m)

Operating result (Euro m)

1H1Q 2Q

2009 2010

2009 2010

Results progression

1H1Q 2Q

504400

104

1H1Q 2Q

527

346 873

1H1Q 2Q


+14.5%

+73.2%


72010 outlook


� Confirmation of positive trend in life notwithstanding an expected less

buoyant growth in 2H10

� Improvement of Non Life technical profitability, thanks to first results from

actions taken in Motor and Non Motor business

� Operating result to be supported by resilient current yields on investment

portfolio

Trend expected for 2H 2010

Outlook of 2010 Total Operating Result (Euro 3.6 - 4.2 bn) overall

confirmed, but targets appear more challenging in the present scenario


8Agenda

II. Insurance operations

Sergio Balbinot - Managing Director


9Main industrial results

Net Inflows

(Euro bn)

Net Technical

Reserves

(Euro bn)

GWP

(Euro bn)

Loss ratio

(%)

NBM

(%)

+34.4%(1)

+5.6%

302.4286.4

+0.7%(1)

7.1+0.4%pts

70.870.4

Life P&C

17.8%19.4%

-1.6%pts

11.811.6

(1) On like for like basis

(2) Including investment contracts

(3) On like for like basis. On historical terms: +6.5%

NBV

(Euro m)

494464

-11.0 %(3)

Combined ratio

(%)+0.9%pts

98.897.9

Reserving ratio

(%)

II. INSURANCE OPERATIONS

1H09 1H10

288.7287.4+1.3%pts

FY09 1H10

1H09 1H10

1H09 1H10

GWP(2)

(Euro bn)

+13.3%(1)

9.6

23.1 26.4

1H09 1H10 1H09 1H10

1H09 1H10

1H09 1H10

1H09 1H10


10Strategic overview: focus on core European markets

Germany � Life and Health:

� Strong increase of Net Inflows (+ Euro 547 m), thanks to premium growth and higher persistency

� Growth of Life single premiums, aimed at retaining customers and future cross-selling initiatives

� Non Life:

� Motor market still competitive: disciplined approach in both underwriting and claims handling

� In terms of business mix, further increase of profitable Non-Motor share (+0.8%pts)

� Marginal CoR increase (+0.2%pts) despite Xynthia impact (Euro 25 m net)

� Satisfactory claims development in Personal and Commercial

� Special initiatives:

� Project Neue Generali well on track

� Company fully operating, without negative impacts on distribution

� IT Migration of Non-Life portfolio successfully completed at beginning 2010, now focus on Life

� Further reduction of General Expenses, thanks to restructuring and to material costs reduction program

Italy


� Life:� Life segment still attractive for customers, also due to present market environment (GWP +17,3%)

� Opportunity to develop traditional insurance products characterized by low return’s volatility

� Good results in life direct sales

� Focus on technical margins and portfolio retention (Net Inflow +1,145 m)

� Non Life:

� First signs of recovery of Motor business GWP (increased average premium);

� Specific portfolio reform activities (health, disease);

� Strengthening of loss prevention activity in Corporate business

� Increase customization of motor tariff and product range

� Operational Improvement:

� Further acceleration of specialization in claims management

� Increased efficiency of traditional networks (agencies)

� Alleanza – Toro fully operational


11Strategic overview: focus on core European markets

� Life:

� Strong UL sales (+ 61% in terms of APE), accounting for > 15%; Resilient sales in Life Risks (Individual + 5%)

� Traditional guaranteed products down 2.1%

� Internet sales in excess of Euro 0.53 bn, up 30%

� Net inflows faring strong, close to Euro 2.9 bn

� Non Life:

� CoR continues to be impacted by Natural events: Q1 (Xynthia) and Q2 (Var floods and East hails)

� Strong emphasis on technical discipline:

� tariff increases > 6% across most lines of business

� claims factory roll-out on target (significant advances in areas such as body-shop networks, recoveries, fraud

prevention, closed file review)


� “Ambition Generali” project to put customer centricity as a top priority

CEE

France

� Life:

� GWP stable compared to last year

� New production shows positive signs in Hungary and Poland

� Life products margin increasing as effect of product redesign

� Non Life:

� Technical result affected by natural events in winter and spring (7.1%pts) but still showing good profitability of underlying

portfolio

� New MTPL and Casco tariffs launched to enhance the segmentation in Czech Republic and Poland


� Focus on adequacy of the Non Life tariffs i.r.o coverage of Natural Perils to properly address Cat exposure

� Launch of new Competence Centre for Retail Property & Casualty



12Agenda

III. Group Financials

Raffaele Agrusti - CFO

Profit & loss review

Shareholders equity & Solvency I

Life & P&C profitability

RoEV

Capital update


13Revenue development by segment

III. GROUP FINANCIALS

(1) Including investment contracts for Euro 2,742 m in 1H10

(2) APE amounts are calculated with end of period perimeter and exchange rates – like for like variations neutralise impacts of variations of perimeter and exchange rates

+10.7

+0.7

+13.3

+9.1

∆ like for like

(%)

1,243

5,128

12,137

17,265

2Q10

+16.3

+1.9

+14.0

+9.9

∆ historical

(%)

+0.12,784

Life annual

premium

equivalent(2)

+1.526,351Life(1)

+1.538,129

Gross written

premiums

+1.711,778P&C

∆ like for like

(%)1H10(Euro m)


14

Consolidation

adjustments

Consolidated

operating result

Financial services

operating result

P&C

operating result

Operating holding

expenses

Life

operating result

(1) Excluding Intesa Vita in 2Q09 and 2Q10, according to IFRS 5 treatment for discontinued operations. On historical terms, the variations would be -0.6% for the life operating

result and +9.4% for the consolidated operating result

2,213

-83

-138

203

663

1,568

1,934

-141

-127

223

710

1,269

1,012

-52

-71

105

328

702

925

-109

-64

130

261

706

+52.2

+6.6

-19.7

+25.7

-10.4

-3.9

2Q10

2Q09

1H10 operating result (Euro m)

Operating result by segment


1H10

1H09

2Q10 operating result (Euro m)

� (%)(1)

+41.4

+14.5

-8.9

-6.6

-8.7

+23.5

� (%)


15Focus on operating result

+14.52,2131,934Total operating

result

+41.4(83)(141)Consolidation Adj.

-8.7(138)(127)Op. holding expenses

+30.6366280Germany

-40.2225377CEE

+10.5

+81.2

-18.8

+3.8

+47.9

∆ %

13373RoW

2,4342,202Operating result(1)

388478RoE

347334France

975660Italy

1H101H09

(Euro m)


Operating result by country(1)

229 19094

22191

167

114 145

119

99

20

65

4 30

12

68743

22

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


16From operating result to net result

(173)(527)Non operating investment income

(187)(371)Income and exp. from other financial instruments

1739Result from discontinued operations (Intesa Vita)

(383)(349)Non-operating holding expenses

(144)(259)Minority interests

+58.21,406889Consolidated result of the period before taxes

and minority interests

(405)(165)Income taxes

+22.7(808)(1,045)Total non operating result

14(156)Income and exp. from fin. assets at FV thr. P&L

+14.52,2131,934Total operating result

+73.2873504Net result of the period

(251)(170)Net other non operating expenses

� (%)1H101H09(Euro m)


(1) Including interest expenses on financial debt

(1)


17Focus on non operating items: non operating investment income

(527)

(173)108

76

170

+18.6%

(409)

(333)

(156)381H09

n.a.+281.8%∆%

141461H10

Non operating investment income (Euro m)

1H101H09Net realised

gainsNet

impairmentsFair Valuethr. P&L


∆ Euro m


18Focus on non operating items: interest expenses on financial debt

334

319

52


Senior

36.2%

Total financial debt(1) (Euro 12.2 bn)Interest expenses on financial debt (Euro m)

1H101H09

Other

10.3%

Average cost & maturity of financial debt(1) (%)

7.37(1)7.83(1)Average maturity (years)

Average cost (%)

1H10FY09

5.35(1)5.35(1) Sub/Hybrid

53.5%

371

(2)

(1) Net of Euro 1,750 m senior bond refinanced in September 2009

(2) Interest related to Euro 1,750 m senior bond refinanced in September 2009


19A balanced investment(1) portfolio

Own investments(2) (Euro 322.5 bn) at 30.06.10


Fixed income

instruments (3)

79.4%

Other (4)

4.2%

Real Estate (5)

4.6%

Equity

8.4%

(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 Euro 326.1 bn, compared to Euro 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.

3.5%

� Government bonds represent

54.5% of total bond portfolio

� High quality corporate bond

portfolio. 81.3% rated ≥ A

� Marginal decrease in equity

exposure due to market

movements and active

management


20

17,14616,652

(27)(544)(13)

627873

(422)

IFRS Shareholders’ equity roll forward

Dividend∆ Currency

Translation

Reserve

1H 2010

Net Result

Other Shareholders’

Equity 1H10

∆ Cash Flow

Hedge

Reserve

∆ in AFS

Reserve

Shareholders’

Equity FY09

+3.0%


(Euro m)

Change in AFS reserve (Euro m)

730

(82)

307

(476)

135

Other AFS Reserve 1H10

Impact Bond Investments

Impact Equity Investments

AFS Reserve

FY09


21

16.9 17.4

23.9 24.3

Solvency I update


Required margin Available margin

1H10FY09

142%(1) 140%(1)

(Euro bn)

Main drivers of change

(1) Including off balance sheet unrealized gains on real estate, 8%pts of which subject to authorities’ authorization

Available margin

� Consolidated result:

� Financial markets and other elements:

Required Margin

� Increase in required margin due to

strong life business growth:

+1.0

-0.6

+0.6


22Life profitability - Operating result

+23.5

-2.7

+36.0

+1.8

�(%)

1,5681,269Operating Result

(2,580)(2,513)Expenses

1,190875Investment Result

2,9582,907Technical Margin

1H101H09(Euro m)


� Life operating profit driven by a strong increase (+36%) of the investment result

� Expenses increasing much less than premiums

� Operating ratio on investments confirmed at satisfactory level

Life Operating Result by driver

Definitions:

• "Technical Margin" includes loadings, risk result, surrender result; it is gross of acquisition and administration costs

• "Investment Result" includes interests and dividends, interest expenses on operating debt, G/L on foreign currency and investment expenses, net of policyholder

benefits; it includes also operating realised and unrealised G/L, net of policyholder benefits

• "Expenses" include acquisition and administration costs and other net operating items (it does not consider any loading charged to policyholders)

• “Operating ratio on Investments” is calculated as Operating result on the average of Investments at book value

0.52%0.49%Life operating ratio on

Investments

1,568

1,269

(67)

315

51

1H10

1H09

Tech.M

Inv.R

Exp.


23Strong growth in life business

42.6243.8FY 2009

+9.6%+4.9%∆%

46.7255.71H 2010


Life net technical reserves(2) (Euro m)Life gross written premiums (Euro bn)

26.423.1

1H101H09

Life net inflows by country(1) (Euro m)

+13.3%(3)

1H10FY09

286.4 11.9 4.1

Traditional Unit Linked

∆

302.4

+133.41,758748RoE

+34.9863607RoW

+34.4

-48.5

+24.4

-8.6

+2,966.7

∆%(3)

9,6017,100TOTAL

165313CEE

2,7882,241Germany

2,8823,153France

1,14537Italy

1H101H09Country

+5.6%

(2) Including investment contracts; excluding Intesa Vita in 1H09 and 1H10,

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


24Life investment strategy and yields(1)

(1) Current return: interest, dividends and similar income / Quarterly average asset base at book value (excluding income related to unit/index linked investments)

(2) Including cash and cash equivalents

(3) Net of consolidation adjustments


3.33.02.02.42.22.2%

464

1H10

434

1H09

Equity Real

estate

Fixed

income

Half

Year

Current

return(1)

264

1H09

2884,6794,398Euro m

1H101H101H09

42,2% 42,2% 42,1%

32,2% 33,2%

9,2% 8,9%

8,0% 9,1% 8,4%

33,0%

8.6%

3,3%3,5%3,7%4,0%3,6%4,7%

1H09 FY09 1H10

Other

Real estate

Equity

Other fixed income

Corporate bonds

Government

bonds

Life segment own investments(2) (% on total)Euro

250.9 bn(3)

Euro

262.8 bn(3)

Euro

233.9 bn(3)

� Increased bond duration from 6 to 6.4 years

� No relevant change in bond portfolio composition. Sector rotation in corporate bonds in order to

improve the portfolio diversification

� Decreased equity exposure due to market drop

� Preference for stocks with high dividend and strong fundamentals


25Life New Business valuation


17.8%

30.8%

24.7%

35.8%

15.7%

10.5%

16.2%

1H10

21.7%

28.2%

23.3%

39.1%

17.7%

10.3%

28.5%

FY09

19.4%

25.4%

25.7%

35.5%

18.2%

8.6%

24.2%

1H09

Margins on APE

+10.7

+4.9

+48.7

-5.5

+2.1

+4.2

+10.9

Like for like �%

2,393

182

276

81

504

644

705

1H09

APE

2,784

222

433

78

520

671

860

1H10

+16.3

+21.6

+56.8

-3.5

+3.1

+4.2

+22.0

Historical�%

+6.5

+47.6

+50.6

-2.5

-11.2

+26.0

-18.3

Historical�%

NBV(Euro m)

+26.070 56 France

-4.528 29 CEE

-11.0494464 Total

46

71

92

171

1H09

68

107

82

139

1H10

+28.0

+37.2

-12.0

-43.5

Like for like�%

RoW

RoE

Germany

Italy

� APE: robust development (+10.7% on a like for like basis), driven by the excellent contribution of single

premiums and the recovery of unit linked business

� NBM: despite the adverse actual economic environment, profitability remains in line with FY09 except for

Italy, where the extraordinary widening of Italian Government bond default spread (+85bps vs FY09) led

to a drop of 7.2%pts. and the related drop of Italian equity market led to an additional drop of 2.7%pts.


26P&C profitability - Operating result

��(%)

-6.6

-33.4

+10.8

-44.0

663710Operating Result

(106)(79)Other

661596Investment Result

108193Technical Result

1H101H09(Euro m)


P&C Operating Result by driver

Definitions:

• “Technical Result” is calculated as the balance of net earned premiums, net insurance claims, acquisition costs, administration costs and other net technical items

• "Investment Result" includes interests and dividends, interest expenses on operating debt, G/L on foreign currency and investment expenses

• “Other" includes other net operating items not considered in Technical Result and in Investment Result

• “Operating ratio on Investments” is calculated as Operating result on the average of Investments at book value

1.79%2.01%P&C operating ratio on

Investments

663

710

(26)

64

(85)

1H10

1H09

Tech.R

Inv.R

Other

� Technical result reduction due to 0.9%pts of Combined Ratio increase

� Investment driver benefits from higher asset base and resilience of current income

� Operating ratio on investments almost in line with 1H09


27P&C Gross Written Premiums


+7.3+11.7653585RoW

-2.3+6.31,1591,091CEE

+4.4+4.42,1282,037France

+1.9

-1.0

-1.5

+1.2

Historical�%

+0.7

-1.8

-1.5

+1.2

Like forlike(1)

�%

2,4012,426RoE

11,77811,558Total

1,8281,855Germany

3,6103,566Italy

1H101H09(Euro m)

(1) Calculated considering equivalent exchange rates and scope of consolidation

� Stable P&C premium base, despite

the challenging economic

environment

� Motor business:

�in Italy, continuing recovery signs

(average new production premium

up 6.8%; average portfolio premium

up 1.3%);

�in Spain, CEE, Germany and

France still under pressure

� Positive growth in Non-Motor retail

and Accident/Health

� First signs of recovery in Commercial


28

0.40.5

P&C profitability - Net combined ratio (1/2)

1H101H09

Combined ratio (%)


Combined ratio by country (%)

98.897.9

Loss ratio Expense ratio

+0.295.995.7Germany

+9.292.9(1)83.7CEE

+0.9

-1.6

+5.1

+0.3

-3.0

∆ %pts.

100.4102.0RoW

98.897.9Total

100.595.4RoE

99.899.5France

99.5102.5Italy

1H101H09

+0.9%pts.

� Expense

ratio

� Loss

ratio

27.9

70.8

27.4

70.4

(1) Excluding Nat Cat, the ratio would be 85.8%


29

6.1

21.3

0.0 0.66.1

21.9

P&C profitability - Net combined ratio (2/2)

70.471.7-3.22.01H 2009

71.8 70.8-3.22.31H 2010


Loss ratio (%)

1H 20101H 2009

70.4 70.80.3 0.0 0.1

Nat

CAT

Prior

years

Current

year

1H 20101H 2009 ∆ Admin ∆ Acq.

Acq. costs

Adm. costs

27.9

Expense ratio (%)

∆%pts

Reserving ratio (%)

1H 20101H 2009

1.3%pts

27.4

287.4% 288.7%

� Nat cat impact still an important driver of

technical profitability

� Prior years development and Reserving ratio

confirm stable and prudent reserving policy

� Current year Loss ratio under control, in spite of

the competitive Motor environment


30P&C investment strategy and yields(1)


P&C segment own investments(2) (% on total)

Euro

37.0 bn(3)

4.34.31.92.31.92.0%

89

1H10

104

1H09

Equity Real

estate

Fixed

income

Half

Year

Current

return(1)

248

1H09

259425432Euro m

1H101H101H09

23,6% 23,4% 23,5%

24,8% 26,8% 28,1%

11,2% 9,9% 9,5%

13,5% 12,6% 12,3%

16,2%16,4%16,6%

10,4%10,8%10,3%

1H09 FY09 1H10

Other

Real estate

Equity

Other fixed income

Corporate bonds

Government

bonds

Euro

36.4 bn(3)

Euro

34.9 bn(3)

� Sustaining current return in low interest rate environment

� Further lengthening bond duration from 4 to 4.5 years in order to exploit the steepness of the yield

curve

� Increased diversification in corporate bond portfolio with selective management

� Duration target on bonds remains 5 years based on a ongoing portfolio approach

� Active management of equity component to generate excess returns over market average

(1) Current return: interest, dividends and similar income / Quarterly average asset base at book value

(2) Including cash and cash equivalents



31

68.463.2

Financial segment


Operating result (Euro m)

Third party AUM (Euro bn)

Net fees and commissions (Euro m)

223 203

1H101H09

-8.9%

433375

1H101H09

+15.5%

94.583.6

1H10FY09

+13.0% +5.2%pts

1H101H09

Cost/income ratio (%)


32Group Embedded Value

Group Embedded Value roll-forward (Euro m)

Normalised

Earnings

Investment

and Tax

Variances

Cash

Dividend

09

EV 1H10

(3,165)

1,611

25,23827,337

(545)

Opening

EV 10

Group EV per share16.4€

Graph of swap vs 10y government spreads

� 1.4 bn due to interest rates reduction

� 1.2 bn due to spread widening

(mainly of Italian government bonds)

� 0.6 bn due to negative impact from

equity investments and increased

volatility, only partially reduced by

positive impact from development of

exchange rates

Causes of Investment variance

-80

-40

0

40

80

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

EUR Italy 10 Year

EUR Germany 10 Year


11.8% Normalised RoEV (1)

(1) Normalised RoEV = Annualised and Normalised Earnings on opening EV


33Economic Solvency and Capital Allocation

Economic Solvency Coverage (Euro bn)

(1) ESC FY09 = AC FY09 (net of proposed dividend 2009 equal to 0.5 bn) divided by Risk Capital FY09

(2) ESC 1H10 = AC 1H10 divided by Risk Capital 1H10

31.8

19.8

ESC 161%(2)

1H10

Group

EV Group

RAC

Available

Capital

Group

Risk Capital

Sub. Debt

Available

Capital

Group

Risk Capital

Sub. Debt

Group

EV

Group

RAC

34.3

18.1

ESC 187%(1)

FY09

Strong Economic Solvency Coverage at 161% despite negative market

developments experienced in recent times



34

IV. Backup

Agenda

P&L

Balance sheet

Life


35

IV. Backup

Agenda

P&L

Balance sheet

Life


361H10 Total gross written premiums

IV. BACK UP

Gross P&C written premiumsGross life written premiums(1)Total gross written premiumsEuro (m)

11,778

653

385

779

792

2,401

1,159

1,828

2,128

3,610

GWP

+0.7

+7.3

+3.8

-0.8

-7.2

-1.8

-2.3

-1.5

+4.4

+1.2

(2)

YoY

% increase

30.9

1.7

1.0

2.0

2.1

6.3

3.0

4.8

5.6

9.5

Weight on

consoli-

dated

26,351

1,853

449

622

526

3,673

824

6,743

6,505

6,753

GWP

+13.3

+19.2

+3.6

+10.8

-17.4

+37.0

-0.5

+12.4

+1.2

+17.3

(2)

YoY

% increase

69.1

4.9

1.2

1.6

1.4

9.6

2.2

17.7

17.1

17.7

Weight on

consoli-

dated

100.0

6.6

2.2

3.7

3.5

15.9

5.2

22.5

22.6

27.2

Weight on

consoli-

dated

+4.01,401Austria

-11.61,318Spain

Of which:

-1.61,982CEE

(2)

+15.82,506

+9.138,129Total

RoW

+3.7834Switzerland

+18.56,073RoE

+9.18,571Germany

+1.98,633France

+11.210,364Italy

YoY

% increaseGWPCountry

(1) Including investment contracts

(2) On like for like basis with constant exchange rates


37Life premiums by country & business line

Life 1H10

Of which:

8241.3%10.2%21.4%67.1%CEE

Total life gross

direct premiums

25,80011.3%7.7%19.3%61.7%

1,51255.2%10.2%0.4%34.2%RoW

4490.2%1.0%78.3%20.6%Switzerland

618-18.4%27.6%54.0%Austria

52644.5%-1.7%53.8%Spain

3,66413.0%3.6%57.7%25.7%RoE

6,7437.5%18.0%24.0%50.5%Germany

6,3955.8%6.3%14.7%73.2%France

6,66410.9%-1.7%87.4%Italy

TotalGroupHealth

Unit/index

linkedTraditional(Euro m)

IV. BACK UP


38P&C premiums by country & business line

P&C 1H10

Of which:

1,14123.5%14.4%9.5%52.5%CEE

Total P&C gross

direct premiums

11,49922.7%21.4%14.1%41.8%

64428.7%4.1%6.7%60.4%RoW

3830.5%23.4%26.7%49.4%Switzerland

76231.3%18.7%10.1%39.9%Austria

77637.2%24.0%13.5%25.3%Spain

2,32527.8%20.4%15.8%35.9%RoE

1,8259.4%36.5%12.9%41.1%Germany

1,99923.4%35.7%12.1%28.9%France

3,56524.3%11.6%17.6%46.5%Italy

TotalCommercialPersonal

Accident/

HealthMotor(1)(Euro m)

IV. BACK UP

(1) Including fleets


39

Loss

ratio

Expense

ratio

P&C - Combined ratio (%)

Total - Expense ratio (%)

70.4 70.8

27.4 27.9

15.9 14.9

10.8 9.8

1H101H09

1H101H09

1H101H09

97.9 98.8

Ratios

IV. BACK UP

Life - Expense ratio (%)


401H10 combined ratio reconciliation

108.2Technical resultA-B-C-D

13.3Other technical itemsD

98.8Combined ratio(B+C)/A

27.9Expense ratioC/A

70.8Loss ratioB/A

2,802.2Total acquisition and insurance related administration costsC

607.1Insurance related consolidated administration costs

29.3Non insurance related administration costs(1)

636.3Consolidated administration costs

2,195.1Consolidated acquisition costs

7,103.8Consolidated net insurance benefits and claimsB

10,027.4Net earned premiums (net of consolidation adjustments)A

(1) Administration expenses related to service companies, real estates and other companies not belonging to P&C segment

(Euro m)

IV. BACK UP


41Ratios by country

18.6

17.8

83.7

92.9

29.6

31.5

54.2

61.3

CEE

9.820.312.47.012.47.38.31H10

10.818.513.44.714.36.69.51H09

Life expense ratio by country

P&C Combined ratio

P&C Expense ratio

P&C Loss ratio

97.9

98.8

27.4

27.9

70.4

70.8

Consolidated

94.7

96.1

27.4

26.1

67.2

70.0

SWI

97.2

96.0

29.0

29.0

68.2

67.0

AUT

92.0

96.5

24.1

26.6

67.9

69.8

SPAFRA

102.5

99.5

22.6

22.4

79.9

77.1

95.799.51H09

95.999.81H10

30.428.11H09

29.528.51H10

1H09

1H10

65.371.3

66.471.3

GERITA(%)

IV. BACK UP


42Reclassified P&L account

(187)(371)Non-operating income from other financial instruments

7191,498Of which net income from fin. assets and liabilities where the risk is borne by the policyholders

1,5322,548Operating income from financial instruments at fair value through profit or loss

1739Result from discontinued operations (Intesa Vita)

(383)(349)Non-operating holding expenses

504

(259)

763

(165)

889

(170)

(15)

(334)

(156)

(1,045)

(192)

(127)

5,040

379

(5,532)

(31,948)

31,766

1,934

1H 09

873Result of the period

(144)Result of the period attributable to minority interests

1,017Consolidated result of the period

(405)Income taxes

1,406Earnings before taxes

(251)Net other non-operating expenses

(12)Other non-operating holding expenses

(371)Interest expenses on financial debt

14Non-operating income from financial instruments at fair value through profit or loss

(808)Non-operating result

(212)Net other operating expenses

(138)Operating holding expenses

6,233Operating income from other financial instruments

433Net fee and commission income and net income from financial service activities

(5,748)Acquisition and administration costs

(33,060)Net insurance benefits and claims

33,174Net earned premiums

2,213Operating result

1H 10

Total(Euro m)

IV. BACK UP


43

(156)---(156)-Non-operating income from fin. instr.at fair value through profit or loss

(2,088)--(2,088)of which var. of provisions related to unit linked business

1,498----1,498of which net income from fin.assets and liabilities where the risk is borne by the policyholders

2,548--89282,431Operating income from fin. Instruments at fair value through profit or loss

5,040(104)-1675684,409Operating income from other fin. Instruments

(476)

-

(349)

-

(349)

-

(127)

-

-

-

-

(127)

Unallocated holding expenses

(349)----Non-operating holding expenses

(127)----Operating holding expenses

889

(170)

(371)

(1,045)

(192)

379

(5,532)

(31,948)

31,766

1,934

Total

(141)

-

-

-

-

(37)

-

-

-

(141)

Consolidation adjustments

187

(30)

(5)

(36)

(45)

375

(364)

0.0

0.0

223

Financial(1)Non life

1,093

(66)

(111)

(177)

(61)

41

(2,415)

(24,916)

21,781

1,269

226Earnings before taxes


(255)Non-operating income from other fin.instr.



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




710Operating result

Life(Euro m)

Reclassified P&L account by segment - 1H 2009

IV. BACK UP

(1) Not reclassified according to the new layout based on operating margins and presented in the Consolidated Report


44

14---14-Non-operating income from fin. instr.at fair value through profit or loss

(1,901)--(1,901)of which var. of provisions related to unit linked business

719----719of which net income from fin.assets and liabilities where the risk is borne by the policyholders

1,532--66951,371Operating income from fin. Instruments at fair value through profit or loss

6,233(24)-1635665,528Operating income from other fin. Instruments

(521)

-

(383)

-

(383)

-

(138)

-

-

-

-

(138)

Unallocated holding expenses

(383)----Non-operating holding expenses

(138)----Operating holding expenses

1,406

(251)

(187)

(808)

(212)

433

(5,748)

(33,060)

33,174

2,213

Total

(81)

(1)

3

2

-

(59)

-

-

-

(83)

Consolidation adjustments

168

(34)

(1)

(35)

(18)

433

(442)

0.0

0.0

203

Financial(1)Non life

1,388

(83)

(97)

(180)

(84)

59

(2,495)

(25,957)

23,147

1,568

452Earnings before taxes


(92)Non-operating income from other fin.instr.



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




663Operating result

Life(Euro m)

Reclassified P&L account by segment - 1H 2010

IV. BACK UP

(1) Not reclassified according to the new layout based on operating margins and presented in the Consolidated Report


45

1,269

1,568

Life operating result

Life operating result (Euro m)

1H101H09

+23.5%

Life Operating result by country (Euro m)

IV. BACK UP

Of which:

-47.494179CEE

Total +23.51,5681,269

+129.69140RoW

+11.35549Switzerland

+166.35019Austria

-15.84958Spain

+30.9221169RoE

+66.9190114Germany

+7.9229212France

+33.6743556Italy

�%1H101H09

(Euro m)


46P&C operating result

1H101H09

-6.6%

IV. BACK UP

Of which:

-37.0119189CEE

Total -6.6663710

+58.42013RoW

+21.32823Switzerland

+21.24537Austria

-31.66797Spain

-47.899189RoE

+3.6145140Germany

-6.0114121France

+184.716759Italy

�%1H101H09

(Euro m)

710

663

P&C operating result (Euro m) P&C Operating result by country (Euro m)


47Other operating and non operating costs by segment

FinancialNon LifeLife

(34.3)

(24.0)

(10.3)

(18.2)

1H10

(19.7)(24.4)(23.3)(2.8)(2.9)Restructuring costs

(45.0)(109.9)(85.7)(84.2)(61.0)TOTAL NET OPERATING EXPENSES

(30.3)

(10.6)

1H09

(73.7)

(50.4)

1H09

(108.4)(79.8)(63.0)Other net non operating expenses(1)

(132.7)(82.7)(65.9)TOTAL NET NON OPERATING EXPENSES

1H101H101H09(Euro m)

(1) Other non operating expenses include mainly amortization of VOBA, run-off business and other non operating allocation to provisions

IV. BACK UP


48

409

602

1,011

193

79

78

661

1H09

110

586

696

16

69

73

537

1H09

-

16

16

12

-

1

3

1H09

300

-

300

166

9

4

121

1H09

122410314Other investments(2)

333

321

655

37

35

461

1H10

-

10

10

-

5

1

1H10

227

-

227

2

24

101

1H10

106

311

418

39

6

359

1H10

Of which

Total net impairments

Total

Operating net

impairments

Equity instruments

Fixed income

Real estate

Financial

Non operating net

impairments

Net impairments

P&CLife(Euro m)

IV. BACK UP

Focus on impairments(1)

(1) Net of reverse impairments

(2) Including subsidiaries and associated companies


49

38

362

400

10

76

461

(147)

1H09

(1)

351

350

(47)

52

383

(37)

1H09

(5)

11

6

(5)

-

12

(2)

1H09

45

-

45

41

46

66

(108)

1H09

16--13Other investments(2)

146

925

1,071

65

654

336

1H10

-

17

17

-

15

2

1H10

135

-

135

52

52

32

1H10

9

907

916

14

588

302

1H10

Of which

Total net realized gains

Total

Operating net realized

gains

Equity instruments

Fixed income

Real estate

Financial

Non operating net

realized gains

Net realized gains

P&CLife(Euro m)

IV. BACK UP

Focus on realised gains(1)

(1) Excluding financial instruments at fair value through profit and loss

(2) Including subsidiaries and associated companies


50

IV. Backup

Agenda

P&L

Balance sheet

Life


51Consolidated balance sheet

(1) Including reinsurance amounts of technical reserve

(2) Including assets and liabilities related to discontinued operations (Intesa Vita)

Assets Liabilities

445.8423.8Total Assets

48.6(2)46.3(2)Other assets (1)

3.93.8Tangible assets

13.811.3Other credits

357.7

11.2

341.5

10.5

Investments

Cash

10.610.4Intangible assets

1H10FY09(Euro bn)

10.69.2

Other debts and

allowances

324.0309.6Technical reserves

445.8423.8

Total Liabilities and

Shareholders’ Equity

36.2(2)34.7(2)Other liabilities

54.450.4

Subordinated and

financial liabilities

20.520.0Shareholders’ Equity

3.33.3Minority interests

17.116.7

Shareholders’ Equity

(Group share)

1H10FY09(Euro bn)

IV. BACK UP


52

322.5

46.4

94.5

1H10 Assets Under Management

Total

Euro 463.4 bn

Fixed income

instruments

79.4%

Other(2)

4.2%

Real Estate (4)

4.6%

Equity

8.4%

Available for sale

57.5%

Loans

25.6%

Real Estate (3)

3.9%

Group

participations

0.7%

Held to maturity

1.3%Fin. Instr. at fair

value thr. P&L

7.6%

Unit Linked

Third parties AUM

“Own Investments” (1)

IV. BACK UP

(1) Own investments include own capital and insurance funds (i.e. unit linked excluded)

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

(3) Excluding real estate mutual funds;

(4) Including real estate mutual funds

Cash & equival.

3.5%Cash & equival.

3.5%

GOVERNMENT BONDS

EXPOSURE TO PERIPHERAL EUROPE

0.53.2Greece

0.53.2Spain

1.911.9Total

0.31.8Ireland

0.63.7Portugal

NetGross(Euro bn)


53

101.5

209.8

11.2

Total

Euro 322.5 bn

Fixed income instruments

78.5%

Of which bonds 55.0%

Of which loans 23.5%

Real estate

12.4%

Other

6.9%

Subs, ass. & JVs

2.2%

IV. BACK UP

1H10 Own Investments at amortized cost and fair value(1)

Fixed income instruments

84.0%

Of which bonds 79.7%

Equity

12.9%

Other

3.1%

Investments at amortized cost

Investments at fair value

(1) Excluding unit linked and third parties

Cash & equivalents


54

33,89533,0146,4746,2423,6303,52523,96223,418Other fixed income

103,090101,5233,7763,79210,47710,40388,83687,329Corporate

123,608121,4452,2012,1978,7198,696112,688110,552Government

249,526 19,980

4,558 389 27,095

260,59212,45122,825

MVMVMV

10,430

225,486

22,147

MV

14,777

255,982

27,095

BV

Total(2)

3894,55822,147Equity

12,23022,624221,299Fixed income instruments

245,9868,767Real estate

BV

Financial

BVBVAsset classes

P&CLife(Euro m)

1H10 book value & market value of Own Investments(1)

IV. BACK UP

(1) Excluding unit linked and third parties



55Quality of 1H10 fixed income portfolio

1.9

2.2

% Current return

by segment

2.5Life

2.5

% Comprehensive

return by segment

P&C

By issuer (%)

Fixed income portfolio composition (Euro 256.0 bn)

50.038.4

18.0

47.4

39.546.0

31.0

39.7

12.9

51.0

15.610.5

Life P&C Financials Total

Government Corporate Other fixed income

IV. BACK UP

Bond portfolio by rating (%)

34.6% 34.9% 19.3%

7.6%

1.8%

1.7%

AAA AA A BBB NIG NR

4.0

6.0

FY 09

6.4Life

4.5

1H 10

P&C

Average bond portfolio

duration by segment (years)


56

39.440.0Italy

1.8

3.7

28.6

8.9

17.0

FY 09

10.2France

1.6

4.1

28.2

16.6

1H 10

Not rated

RoW

RoE

Germany

% Split by country

Focus on 1H10 government bond portfolio

42%24%

9%

Life P&C Financial

(Euro 121.4 bn, 47.4% of total fixed income portfolio)

IV. BACK UP

% of segmental own investments% Split by accounting treatment

18.981.1

Amortized cost Fair Value

38.840.4AAA

0.8

0.1

3.1

3.9

51.6

FY 09

5.5A

1.0

1.9

1.9

51.0

1H 10

Not rated

Not investment grade

BBB

AA

% Split by rating


57Focus on 1H10 corporate bond portfolio

(Euro 101.5 bn, 39.7% of total fixed income portfolio)

IV. BACK UP

32.4

67.6

Amortized cost Fair Value

33% 28%16%

Life P&C Financial

% of segmental own investments% Split by accounting treatment

(1) Net exposure to Tier 1 is Euro 0.6 bn

29.529.3AAA

3.1

1.3

11.4

37.4

17.5

FY 09

36.1A

2.5

1.7

14.5

15.7

1H 10

Not rated

Not investment grade

BBB

AA

% Split by rating

64.967.8Financials(1)

12.5

4.0

3.8

4.1

7.8

FY 09

4.1ABS

12.5

4.6

4.8

9.1

1H 10

Other

Industrial

Telecom

Utilities

% Split by industry


58Focus on 1H10 equity portfolio

8% 12% 2%

Life P&C Financial

1.9

2.0

% Current return

by segment

-4.6Life

-3.8

% Comprehensive

return by segment

P&C

(Euro 27.1 bn)

IV. BACK UP

% of total own investments

7.0

27.1

(0.4)(1.0)(17.7)

(0.9)

Group net equity exposure

MinoritiesTaxes Net

equity

exposure

Policyholders’

interests

HedgingGross

equity

exposure

22.224.9Financials

28.5

20.2

7.2

8.8

10.4

FY 09

9.0Telecom

30.1

22.2

6.5

10.0

1H 10

Funds

Other

Industrial

Consumer

% Split by industry


59Investment yields

2.3

2.3

3.5

3.1

3.1

4.3

2.0

2.0

3.0

1H09

4.8

0.7

2.6

4.6

-3.3

2.3

4.3

1.3

2.4

1H09

2.2

2.4

2.2

2.7

2.3

2.0

2.1

2.5

2.2

1H09

Bonds and Loans

2.4

2.5

2.1

2.5

2.1

1.9

2.5

2.6

2.2

1H10

2.71.4Total P&L return(2)



Investment propertiesEquities

TOTAL

2.7

3.7

3.3

4.3

2.3

3.3

1H10

-4.6Comprehensive return(3)

LIFE

NON LIFE

2.1Current return(1)





1H10(%)

(1) Current return: interest, dividends and similar income / Quarterly average asset base at book value (excluding income related to unit/index linked investments)

(2) Total P%L return: = current return + realised gains/losses + net impairments, net of investment expenses / Quarterly average asset base at book value (excluding

income related to unit/index linked investments)

(3) Comprehensive return:

a. for fair value investment (AFS, FVthPL) = current return + total change in fair value, net of investment expenses / average asset base at fair value (excluding income

related to unit/index linked investments)

b. for investment at amortised cost (Real estates, loans, HtM) = current return + realised gains/losses + net impairments, net of investment expenses / quarterly

average asset base at AC

IV. BACK UP


60IFRS Shareholders’ equity roll forward

730

1,241

307

(276)

(558)

(100)

17,14616,652

18,002

(68)

346

(934)

333 11

(544)

-4.8%

IFRS Shareholders’ equity roll forward (Euro m)

Change in AFS reserve (Euro m)

Shareholders‘

Equity 1Q10

Dividend∆ Currency

Translation

Reserve

1H 2010

Net Result

Other Shareholders’

Equity 1H10

∆ Cash Flow

Hedge

Reserve

∆ in

AFS

Reserve

Shareholders’

Equity FY09

AFS Reserve

1Q10

Other AFS Reserve 1H10

Impact Bond Investments

Impact Equity Investments

AFS Reserve

FY09

IV. BACK UP


61

140

127

129

151

135

136

Stress tests on Solvency I and Shareholders’ equity

Impact on regulatory solvency ratio (%) Impact on 1H10 Shareholders’ equity (Euro bn)

Total ratio 1H10

Equities -30%

Interest rate +100bps

Interest rate -100bps

Credit spread +100bps

Real estate -10%

(2.2)

(1.8)

1.9

(0.9)

Equities -30%

Interest rate +100bps

Interest rate -100bps

Credit spread +100bps

(1) (1)

(1) Before hedging impact

IV. BACK UP


62Total comprehensive income(1)(2)

1,308

(1,031)

1,916

794

(178)

(1,010)

181

(505)

459

(245)

1Q10 2Q104Q093Q092Q091Q094Q083Q082Q081Q08

(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

1,308

1Q10

1,0632,9902,532616(178)(2,365)(1,354)(1,536)(1,031)

1H10FY099M091H091Q09FY089M081H081Q08

+3,000 m

-3,000 m


63AFS reserve breakdown

163(416)(56)Corporate

197(38)281Government

(0.2)(263)475Equity

307(889)730TOTAL

(53)(172)29Investment funds and other

360

1H10

(454)

1H09

225Fixed income instruments

FY09(Euro m)

IV. BACK UP


64Financial debt schedule

0

500

1000

1500

2000

2500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2024 2026

Hybrid Subordinated Senior Loans

2,500

2,000

1,500

1,000

500

0

Bonds

(1)

(1) Pro forma including refinancing of Euro 1,750 senior bond maturing in July 2010 already completed

Financial debt breakdown by expiry date/call date (Euro m)

IV. BACK UP


651H10 technical reserves

IV. BACK UP

302,35746,686255,671GROUP TOTAL

6,5111,0985,412CEE

81,80611,20470,601Germany

13,782

6,597

Linked

79,01465,232France

82,71076,112Italy

Life net technical reserves(1)

TOTALTraditional(Euro m)

(1) Including investment contracts for Euro 14,053 million

13,908

1,225

2,026

2,088

5,200

Motor

31,00217,094GROUP TOTAL

1,958733CEE

4,4612.434Germany

5,4573,369France

12,9867,786Italy

P&C net technical reserves

TOTALNon Motor(Euro m)


66Operating ratio on investments

IV. BACK UP

0.49

3.09

0.16

0.33

0.64

1H09 (%)

0.52

1.37

0.24

0.30

0.92

1H10(%)

+0.03GROUP TOTAL

-1.72CEE

+0.08Germany

-0.03France

+0.28Italy

�(%pts.)

Life operating ratio on investments (%)

P&C operating ratio on investments (%)

2.01

7.34

2.36

2.29

0.47

1H09 (%)

1.79

3.84

2.31

2.10

0.75

1H10 (%)

-0.22GROUP TOTAL

-3.50CEE

-0.05Germany

-0.19France

+0.28Italy

�(%pts.)

Definition: “Operating ratio on Investments” is calculated as Operating result on the average of Investments at book value


67Number of shares(1)

1,414,072,429

Weighted number of shares outstanding in year ending

12.31.2009 adjusted for the effects of all dilutive

potential ordinary shares.

1, 357,891,906


30.06.2009 adjusted for the effects of all dilutive

potential ordinary shares.

---Stock options

Potential (dilutive) shares:

1,540,840,351


06.30.2010

1,540,841,68616,031,5971,556,873,283shares outstanding at 06.30.2010

163(163)-Generali shares purchase

8,800-8,800Exercise of stock options

---Stock grant plan

---Capital increase

1,540,832,72316,031,7601,556,864,483shares outstanding at 12.31.2009

1,414,072,429


12.31.2009

Shares

outstanding

(1-2)

Own

shares

(2)

Ordinary

Shares issued

(1)

(1) Calculation based on IAS 33

IV. BACK UP


68

IV. Backup

Agenda

P&L

Balance sheet

Life


69Life new business: APE

+63.21,323 803 -9.5388 424 +2.1520 504 Germany

+1.15,151 5,097 +16.1155 134 +4.2671 644 France

-15.6352 417 +33.829 22 +1.364 64 Spain

+43.2130 86 -11.565 72 -5.578 81 CEE

+93.32,174 1,107 +20.6216 165 +48.7433 276 RoE

+64.6144 72 +3.839 30 +15.453 37 Austria

12,801

494

39

3,530

1H10

Single Premiums

1,504

172

38

507

1H10

Annual PremiumsAPE

2,784

222

42

860

1H10

10,347

305

26

2,950

1H09

(Euro m)

+26.9

+39.4

+31.9

+35.3

Like for like �%

-0.1

-2.1

-12.0

-1.5

Like for like �%

1,358 +10.72,393 Total

182

40

705

1H09

+4.9

-9.2

+10.9

Like for like �%

152 RoW

37 Switzerland

410

1H09

Italy

IV. BACK UP


70

983 1,087

FY09 1H10

1H10 Valuation of Life based on:

� same market consistent methodology applied at FY09

� 1H10 actual economic scenario (interest rates, volatilities, market value of assets and asset-mix)

� FY09 operating assumptions (mortality, surrender, expenses)

Life & Asset Gathering VIF

14,32311,701

FY09 1H10

Life Value of In-force Business

(Euro m)

-18.3% (*)

Asset Gathering Value of In-force Business

(Euro m)

+10.6% (*)

(*) -20.6% on a like for like basis (*) -0.2% on a like for like basis

IV. BACK UP


71What’s next

November 11, 2010 - 9M 2010 Results


72Investor Relations Team

Paola Buratti (Tel.: +39-040-671157)

Head of Investor Relations

Email: [email protected]

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


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


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


Rodolfo Svara (Tel.: +39-040-671823)


Marta Porczynska (Tel.: +39-040-671402)

IR Events


Assicurazioni Generali

P.za Duca degli Abruzzi 2

34132 Trieste, Italy

Fax: +39 040 671338

e-mail:[email protected]

www.generali.com


73Disclaimer

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.

March 2006

Generali Group

2010 First-Half Results

Milan, March xxx, 2010August 5, 2010

Generali Group 2010 first half results

Business

Transcript of Generali Group 2010 first half results