Generali Group 9M Results 2015

GENERALI GROUP 9M 2015 Results

Please note that prior year’s figures have been restated throughout the whole presentation to reflect the new perimeter of the Group.

Net income, Shareholders’ Equity, Solvency I, Life Value KPIs, Embedded Value are not adjusted for disposed entities.

The like for like change of written premiums, life net inflows, APE and NBV is on equivalent terms (on equivalent exchange rates and consolidation area).

© Generali

November 5, 2015 9M 2015 Results

Agenda

I. Profit & Loss and Balance Sheet Page 3

II. Business Review Page 10

III. Backup 4

2

© Generali


Agenda

I. Profit & Loss and Balance Sheet

3

© Generali


Net Result: Increasing 9%, to €1.7bn, already surpassing full year 2014. Driven by the further improved

operating performance of the period and the lower interest expenses on financial debt

Operating Result: Continued to increase thanks to both Life business (+4%) and P&C business (+5%)

Life: Growing operating result despite weaker market conditions. High net flows especially in unit linked, with

strongly improving new business margin in 3Q

P&C: Further improvement in combined ratio, despite higher Nat Cat

Shareholders’ equity: Slightly decreasing compared to year end, due to market effects, dividend paid,

and deconsolidation of BSI

Economic Solvency: Up 10%pts from year end to 196%

Key 9M 2015 financials at a glance

Profit & Loss 4

9M14 9M15 LFL D 3Q14 3Q15 LFL D

Operating result (Euro m) 3,668 3,840 +4.7% 1,170 1,061 -9.3%

Net result (Euro m) 1,588 1,727 +8.7% 513 420 -18.2%

EPS (Euro) 1.02 1.11 +8.7% 0.33 0.27 -18.2%

Operating RoE(1) 13.0% 13.9% +0.9%pts

Shareholders’ equity(2) 23,204 22,764 -1.9%

Economic Solvency(2) 186% 196% +10%pts.

(1) The annualized operating RoE is calculated on a rolling basis, as the sum of the last four quarterly operating RoE ratios. (2) Comparative data FY14

© Generali


3,668 88 42 3,840

9M14 Life P&C Holding & Otherbusinesses

Cons. Adj 9M15

Operating result by segment

Profit & Loss

5

+4.7% (Euro m)

9M 15 2,338 1,605 56 (159)

9M 14 2,251 1,530 87 (200)

D +3.9% +4.8% -36.4% -20.8%

74

(32)

© Generali


From operating result to net profit

Profit & Loss

6

3,840 247

(554)

(559)

(1,041) (35) (171)

1,727

Operating

Result

Non Oper.

Investment

Income

Non Oper.

Holding

Expenses

Net Other

Non Oper.

Expenses

Taxes Disc.

Operations

Minorities Net

Result

Including: -€ 513 m: Interest costs

Including: -€ 213 m: Restructuring costs

-€ 99 m: VOBA amortisation

-€ 246 m: other non-recurring provisons

9M 15 3,840 247 (554) (559) (1,041) (35) (171) 1,727

9M 14 3,668 (18) (606) (300) (987) (8) (161) 1,588

D +4.7% n.m. -8.6% +86.6% +5.5% n.m. +5.9% +8.7%

(Euro m)

© Generali


Shareholders’ equity rollforward (Euro m)

Shareholders’ equity

Balance Sheet 7

Change in AFS reserve (Euro m)

Shareholders’ equity sensitivities (Euro bn)

Equities

-30%

Interest rate

+100bps

Interest rate

-100bps

Credit spread

+100bps

-1.7

-3.0

2.3

-0.7

-1.9%

23,204 22,764

(1,059) (934) (174)

1,727

Shareholders'Equity FY14

Δ in AFS Reserve

9M 2015 NetResults

Dividend Other Shareholders'Equity 9M15

(957) (114)

6,498 12 5,440

AFS Reserve FY14 Impact BondInvestment

Impact EquityInvestments

Other AFS Reserve 9M15

© Generali


Solvency I

Capital 8

+10%pts.

162

162

178

149

156

166

Real estate -10%

Credit spread + 100bps

Interest rate -100bps

Interest rate +100bps

Equities -30%

Total ratio 30.09.2015

156% 8%pts

(5%pts)

10%pts

(3%pts)

166%

Solvency IFY14

BSI DISPOSAL REQUIRED MARGINGROWTH

CONSOLIDATEDRESULT

FINANCIALMARKETS AND

OTHER

Solvency I9M15 (1)

Strong improvement of the Solvency capital position mainly

thanks to:

the closing of the sale of BSI to Banco BTG Pactual

the result of the period

Solvency I rollforward (%)

Solvency I ratio sensitivities (%)

(1) For interim closings, no accrued dividends are deducted from available margin

© Generali


186% 8% 2% 196%

ESR FY14 ESR 9M15

Economic solvency

Pro-forma internal model ESR roll-forward

Capital

Increase in ESR mainly driven by the contribution of normalised earnings

9

+10 %pts.

(1) Eligible Own Funds (2) Solvency Capital Requirement

Change in

EOF(1)

Change in

SCR(2)

© Generali


Agenda

II. Business Review

10

© Generali


9M14 9M15 LFL D 3Q14 3Q15 LFL D

Gross written premiums 35,610 38,425 +7.0% 11,492 11,519 -0.6%

Net inflows 9,020 11,008 +20.6% 3,156 2,809 -12.7%

Life operating result 2,251 2,338 +3.9% 737 625 -15.2%

Life operating ratio on

investments (bps) 63 58 -5 20 16 -3

APE 3,666 3,784 +1.7% 1,146 1,077 -6.4%

New Business Value 934 757 -20.7% 283 283 -0.8%

Margin on APE (%) 25.5% 20.0% -5.6%pts. 24.7% 26.2% +1.5%pts.

Life key financial indicators

Life Insurance 11

(Euro m)

© Generali


2,251

318 104

(335)

2,338

9M14 Technical Margin Investment result Expenses 9M15

Life Operating result by driver

Life Insurance 12

+3.9%

(Euro m)

9M 15 4,303 1,780 (3,745)

9M 14 3,985 1,676 (3,410)

D % +8.0% +6.2% +9.8%

Operating result up 3.9%:

Excellent technical margin thanks to higher risk result and unit linked fees

Improving investment result, thanks to higher current income

Expense result reflects higher acquisition costs, following increased volumes

New assets gathered of Euro 11bn in 9M15, which will generate additional operating profits in

future periods

© Generali


Life inflows and technical reserves(1)

Life Insurance

(1) Including liabilities related to investment contracts

+4.7%

+7.4%

+4.0%

Unit linked

Traditional

(Euro m)

9M14 9M15

Italy 3,652 5,003

France 398 999

Germany 2,183 2,696

CEE 359 394

EMEA 2,194 1,260

Americas 89 105

Asia 125 514

International 20 36

TOTAL 9,020 11,008

Saving and

pension 24%

Protection 24%

Unit linked 53%

13

279.7 290.9

67.5 72.5

347.2 11.0

(4.3)

8.1 1.4 363.3

FY14 NetInflows

Loadings,Risk &

Surrender Result

Policyh. Shareof Invest. Result

ExchangeRate & Other

9M15

© Generali


Life investment performance

Life Insurance 14

Euro 321 bn Euro 328 bn

(1) Not annualized

(2) Net of depreciation expenses

47.0 44.9

34.5 36.1

7.7 8.0

4.0 4.1 3.1 2.9 2.1 2.5 1.6 1.4

FY14 9M15

Other

Cash & cashequivalent

Real estate

Equity

Other fixedincome

Corporatebonds

Governmentbonds

Euro m %

Fixed income

9M14 7,075 2.7

9M15 7,291 2.5

Equity

9M14 386 3.0

9M15 287 2.1

Real Estate(1)

9M14 419 4.3

9M15 458 4.7

Total(2)

9M14 8,103 2.7

9M15 8,220 2.5

Life segment general account (%)

Current returns(1)

© Generali


Life new business analysis

Life Insurance 15

APE NBV MARGIN ON APE

9M14 9M15 LFL D 9M14 9M15 LFL D 9M14 9M15 LFL D

Italy 1,706 1,619 -5.1% 474 406 -14.2% 27.8% 25.1% -2.7%pts.

France 627 730 +17.1% 77 42 -45.4% 12.2% 5.7% -6.5%pts.

Germany 608 628 +2.1% 195 130 -34.2% 32.1% 20.7% -11.5%pts.

CEE 103 123 -1.0% 33 29 -26.7% 31.9% 23.8% -8.4%pts.

EMEA 514 481 -8.0% 141 119 -19.6% 27.4% 24.8% -3.6%pts.

Americas & Asia 109 204 +58.1% 14 30 +70.2% 13.3% 14.9% 1.1%pts.

TOTAL 3,666 3,784 +1.7% 934 757 -20.7% 25.5% 20.0% -5.6%pts.

(Euro m)

APE growth (+1.7%) driven by unit linked (+23.9%) and protection business (+21.0%), while saving

business shows a 10.0% decline.

Very strong improvement NBM in Q3 (to 26.2%), driving the 9M15 margin to 20.0%:

Better product mix and a further marked reduction of level of guarantees (in Euro area from 0.93% 9M14 to 0.65%

9M15) are positive factors

Overall economic variances for the year to date remain negative, but 3Q showed a notable improvement vs. 2Q

Embedded profitability of new business almost double the existing book

© Generali


P&C key financial Indicators

P&C Insurance

16

9M14 9M15 LFL D 3Q14 3Q15 LFL D

Gross written premiums, of which: 15,564 15,775 +0.8% 4,395 4,509 +2.4%

Primary Motor 6,319 6,333 -0.9% 1,803 1,835 +1.1%

Primary Non Motor 8,748 8,915 +1.7% 2,442 2,524 +3.6%

Combined ratio (%) 93.4% 92.7% -0.8%pts. 94.6% 92.7% -1.9%pts.

Nat Cat impact (%) 1.2% 1.6% +0.4%pts. 1.0% 1.9% +0.9%pts.

P&C operating result 1,530 1,605 +4.8% 452 501 +11.0%

(Euro m)

© Generali


1,530 104

(21) (9)

1,605

9M14 Technical Result Investment result Other 9M15

P&C Operating result by driver

P&C Insurance 17

+4.8%

(Euro m)

9M 15 981 768 (144)

9M 14 877 789 (135)

D % +11.8% -2.6% +6.5%

Operating result up 4.8%

Excellent technical performance thanks to the decline in the loss ratio, despite higher Nat Cat

impact, much more than offsetting slight decline in investment result

© Generali


9M14 9M15 LFL

Italy 4,155 4,035 -2.9%

France 2,002 1,985 -0.9%

Germany 2,881 2,910 +1.0%

CEE 1,446 1,504 +3.9%

EMEA 3,394 3,541 +1.7%

Americas 773 879 +8.6%

Asia 78 91 +15.1%

International 835 831 +4.3%

Total 15,564 15,775 +0.8%

P&C gross written premiums trends

P&C Insurance

18

(Euro m)

Overall increase of premiums (+0.8%), benefitting from

positive development in 3Q15 (+2.4%)

2.9% decline in Italy due to competitive environment in

Motor (-8.4%). Significant mitigation from 1.1% increase

in the larger Non Motor book

Decline in France due to Motor, partially offset by the

increase in Non Motor (continuation of recovery in

Personal lines). Good development in the 3rd quarter

(+3.1%)

Improvement in Germany and CEE, thanks to Motor and

Non Motor in both regions

© Generali


66.6 65.6

26.8

0.2

27.0

(1.0)

93.4 92.7

9M14 Δ Expense ratio Δ Loss ratio 9M15

26.8 27.0

21.0

0.1

21.1

5.8

0.2

6.0

9M14 Δ Admin Δ Acq. 9M15

Combined ratio analysis

P&C Insurance

19

Loss ratio

Expense ratio

66.6

(1.0)

0.4

(0.3)

65.6

9M14 Current year NATCAT Prior years 9M15

Combined ratio (%)

-0.8%pts.

9M 15 68.4 1.6 -4.3 65.6

9M 14 69.4 1.2 -4.0 66.6

Expense ratio (%)

Loss ratio (%)

Acquisition costs

Administr. costs

+0.2%pts.

-1.0%pts.

© Generali


Combined ratio by country

P&C Insurance 20

9M14 9M15 LFL

Italy 89.1% 89.4% +0.2%pts.

France 105.4% 99.3% -6.1%pts.

Germany 93.5% 91.6% -1.9%pts.

CEE 87.3% 86.5% -0.9%pts.

EMEA 94.5% 94.7% +0.2%pts.

Americas 107.7% 103.3% -4.5%pts.

Asia 96.6% 97.0% +0.4%pts.

International

Operations 81.2% 86.9% +5.7%pts.

Total 93.4% 92.7% -0.8%pts.

(%)

Combined ratio in Italy remains at an excellent level,

despite heavier Nat Cat impact (2.1%pts. against

0.9%pts. reported at 9M14) and highly competitive motor

market. Improvement in Non-Motor combined ratio is

offsetting the deteriorating trend seen in Motor

Improvement in France driven by 3.2%pts. improvement

in ex-Nat Cat combined ratio (reflecting success of

portfolio restructuring), and 2.9%pts. lower Nat Cat.

Combined ratio improving in Germany, despite Nat Cat

impact (3.2%pts. against 1.7%pts. in 9M14), thanks to

strong positive development in Non Motor

Improvement in CEE, despite higher Nat Cat (1.3%pts.

against 0.6%pts.)

© Generali


P&C investment performance

P&C Insurance 21

Euro 39 bn Euro 39 bn

26.0 26.3

35.4 35.1

5.9 6.7

8.7 7.1

11.1 10.9

9.8 10.4

3.1 3.5

FY14 9M15

Other

Cash & cashequivalent

Real estate

Equity

Other fixedincome

Corporatebonds

Governmentbonds

Euro m %

Fixed income

9M14 645 2.6

9M15 626 2.4

Equity

9M14 99 2.9

9M15 87 2.7

Real Estate(1)

9M14 198 4.3

9M15 192 4.5

Total(2)

9M14 1013 2.7

9M15 959 2.5

P&C segment general account (%)

Current returns(1)

(1) Not annualized

(2) Net of depreciation expenses

© Generali


9M14 9M15 LFL 3Q14 3Q15 LFL

Financial 291 319 +9.4% 91 74 -19.0%

of which Banca Generali(1) 176 205 +16.2% 51 33 -35.3%

Operating holding expenses (290) (358) +23.2% (94) (107) +14.5%

Other businesses(2) 86 95 +9.7% 24 18 -25.0%

Total 87 56 -36.4% 22 (15) n.m.

Focus on Holding & Other businesses segment Holding & Other businesses

22

(Euro m)

(1) Banca Generali’s operating contribution as per Generali’s view

(2) Including pure financial holdings, international service activities and any other non-core businesses

© Generali


Final remarks

Final remarks 23

Life: Growing operating profit despite tough market conditions. Strong

net inflows, with > 50% unit linked. Rebound of new business margin in

3Q

P&C: Excellent CoR despite higher Nat Cat. Stable or improving in all

core markets

Net Result: At Euro 1.7 bn for the 9M, already surpassing FY14

level. Significant YoY improvement expected for FY15

Solvency: Strong at 196%, +10%pts compared to FY14

© Generali


Agenda

III. Backup

24

Costs Page 25

Investments Page 27

Financial debt Page 33

© Generali


9M15 Cost development

Back up: Focus on costs 25

Group operating expense development (OpEx view) (Euro bn)

Reconciliation of general expenses from IFRS view to OpEx view (9M15, Euro bn)

Increase in Operating costs at 9M reflecting adverse FX

trends and some timing differences through the year

We remain on track to keep FY15 nominal costs flat

on a constant FX basis, in line with our target

Acq.& Admin costs and Oper. Holding Expenses accounting

view (per segmental operating profit analysis)

Adjustments from accounting view

Adjusted general expense base (OpEx view)

4.0

3.7

0.6

(4.6)

0.7 0.2 4.7

Acq. & Admin. Costs and

Oper. Holding Expenses

Commissions & DAC

Claims settlemement

costs (included in

Net Ins. Benefit and

Claims)

Other items & adjustments

Total general expenses

(OpEx view)

Holding & other

Life

P&C

4.5 4.7

9M 14 9M 15

LFL ∆

2.0%

© Generali


Agenda

III. Backup

26

Costs Page 25

Investments Page 27


© Generali


27

Assets under management

Backup: Investments

75.3

14.7

10.0 Generalaccount

Unit Linked

Third partyinvestments

5

87

4 3

1 Equity

Fixed income

Real estate

Cash & Cash Equivalent

Other

By Asset Class

By Region

31

23

29

3

10 4 Italy

France

Germany

CEE

EMEA

RoW and other operations

Total Portfolio: Euro 494 bn (%)

Breakdown by region and asset class (%)

© Generali


4 7

35

41

12 1

AAA AA A BBB Not Investment Grade Not Rated

68

16

9 4 1

1

13

34

4

46

2 0

Fixed Income Portfolio

Backup: Investments 28

(1) Italian government bond exposure is 82% of BBB

Bond duration FY14 9M15

Life 8.2 8.1

P&C 4.6 4.9

49.7

14.0

18.1

9.0

9.2

Other fixedIncome

Covered

Corporate nonfin.

Corporate fin.

Government

Total Portfolio Euro 323 bn (%)

Covered Euro 29 bn (%)

Corporate Euro 104 bn (%)

Government Euro 161 bn(1) (%)

© Generali


14

13

18

2 12

40

Italy Germany France CEE USA Other

8

13

33

2

1

45 38

4 19

7

4

28

Fixed Income Portfolio by country

Backup: Investments 29

49.7

14.0

18.1

9.0

9.2

Other fixedIncome

Covered

Corporate nonfin.

Corporate fin.

Government

Total Portfolio Euro 323 bn (%)

Covered Euro 29 bn (%)

Corporate Euro 104 bn (%)

Government Euro 161 bn (%)

© Generali


76

19

5

Life

P&C

H&O

77

23

Quoted

Unquoted

67 5

28

Life

P&C

H&O

81

18 1

Life

P&C

H&O

55

21

24

Equity Equity Funds Alternatives

Equity & Equity-like

Backup: Investments

30

Life, P&C and

Financial

Life, P&C and

Financial

Life, P&C and

Financial

Listed and

Unlisted

Total Portfolio: Euro 18 bn (%)

Alternative funds: Euro 4.2 bn (%)

Equity: Euro 9.9 bn (%)

Equity funds: Euro 3.8 bn (%)

© Generali


84

16

Investmentproperties

Own use

65

16

11 3 4

Office

Residential

Retail

Logistic

Other/Mixed

Asset Allocation: Real Estate(1)

Backup: Investments

31

35

17

25

2

19

2 Italy

Germany

France

CEE

RoE

RoW

(1) Data, at fair value, includes own use assets and property inventory (2) Detail referred to direct investment and self used properties only

Total Portfolio: Euro 24 bn(1)

Breakdown by use(2) (%)

Breakdown by country(2) (%)

Breakdown by utilization(2) (%)

© Generali


Focus on financial debt

Backup: Financial debt 33

3,477 2,983

8,315 8,418

460 462

FY14 9M15

Senior Sub/Hybrid Other

FY14 9M15

Average cost (%) 5.62% 5.67%

Subordinated/Hybrid 6.21% 6.22%

Senior 4.13% 4.17%

Average maturity

(years) 6.87 6.40

Euro 12,253 m (1) Euro 11,863 m

Total financial debt (Euro bn)

Average cost & maturity of financial debt (%)

(1) The amount of financial debt as of December, 31, includes the subordinated bond issued in May 2014 for a nominal amount of Euro 1 bn partly to refinance 2015

maturities

© Generali


1,240

887

250

770

1,250

2,672

1,750

1,500 1,475

1,250

2016 2017 2018 2019 2020 2022 2024 2025 2026 2027

Senior Hybrid Subordinated

Financial debt breakdown by expiry date/call date

Backup: Financial debt

34

(Euro m)

New issue

launched 20

October 2015

Tier 2

Subordinated

32nc12

Callable bonds

refinanced

throught the new

issuance Tier 2

Subordinated

32nc12

© Generali


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 charged with preparing the company’s financial reports, Alberto Minali, 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.

35

© Generali


36

Next events

18.03.2016

FY 2015 results reporting

28.04.2016

Annual General Meeting

12.05.2016

1Q 2016 results reporting

29.07.2016

1H 2016 results reporting

10.11.2016

9M 2016 results reporting

© Generali


Team

Marta Porczynska

Team Assistant & Event Manager

[email protected]

+39 040 671402

Martina Vono

Team Assistant & Event Manager

[email protected]

+39 040 671548

Assicurazioni Generali

P.za Duca degli Abruzzi 2

34132 Trieste, Italy

Fax: +39 040 671338

e-mail: [email protected]

www.generali.com

Spencer Horgan

Head of Investor & Rating Agency Relations

[email protected]

+44 20 7265 6480

Stefano Burrino

Senior IR Manager

[email protected]

+39 040 671202

Emanuele Marciante

Senior IR Manager – Credit & Rating Agency Relations

[email protected]

+39 040 671347

Veronica Cherini

IR Manager

[email protected]

+39 040 671488

Rodolfo Svara

IR Manager

[email protected]

+39 040 671823

37

Thank you

38

GENERALI GROUP 9M 2015 Results

Generali Group 9M Results 2015

Business

Transcript of Generali Group 9M Results 2015