Generali Group 1Q 2014 Results

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Text of Generali Group 1Q 2014 Results

  • 1. Generali May 15, 2014 1Q 2014 Results GENERALI GROUP 1Q 2014 Results Please note that prior years 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 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).

2. Generali May 15, 2014 1Q 2014 Results Agenda 2 - Profit & Loss and Balance Sheet Page 3 - Business review Page 10 - Backup Page 24 3. Generali May 15, 2014 1Q 2014 Results Agenda I. Profit & Loss and Balance Sheet 3 4. Generali May 15, 2014 1Q 2014 Results Operating Result: Stable at the high level of last year Life: Steady despite low yield environment; strong net flows continue P&C: Increasing thanks to higher technical and investment results Net Result: Increasing mainly due to improvement in non-operating investment result Solvency I: Strong contribution from net result and financial market development. Following the end of Q1: Ineligible loan of 500 m repaid and replaced during Q2. Solvency I ratio at end April was ~ 160% 1Q13 1Q14 LFL D Operating result ( m) Of which: Life Of which: P&C 1,290 781 498 1,296 779 516 +0.5% -0.2% +3.7% Net result ( m) 603 660 +9.4% Shareholders equity(1) 19,778 21,741 +9.9% Solvency I(1) 141% 152% +11%pts. 4 Key 1Q 2014 financials at a glance Profit & Loss (1) Comparative data FY13 5. Generali May 15, 2014 1Q 2014 Results 1,290 19 25 1,296 (1) (14) (22) 1Q13 LIFE P&C FINANCIAL SERVICES HOLDING EXP. CONS.AD 1Q14 5 Operating result by segment Profit & Loss ( m) +0.5% 1Q14 779 516 144 (97) (47) 1Q13 781 498 119 (83) (25) D -0.2% +3.7% +21.0% +17.4% +87.5% 6. Generali May 15, 2014 1Q 2014 Results 6 From operating result to net profit Profit & Loss 1Q14 1,296 129 (210) (161) (323) 1 (72) 660 1Q13 1,290 (18) (187) (78) (347) 13 (69) 603 D +0.5% n.m. +11.9% n.m. -6.9% n.m. +3.5% +9.4% 1,296 129 (210) (161) (323) 1 (72) 660 OPERATING RESULT NON OPER. INVESTMENT INCOME NON OPER. HOLDING EXPENSES NET OTHER NON OPER. EXPENSES INCOME TAXES DISC. OPERATIONS MINORITIES NET RESULT ( m) 7. Generali May 15, 2014 1Q 2014 Results 7 Shareholders equity Balance Sheet Change in AFS reserve ( m) + 9.9% Shareholders equity rollforward ( m) 19,778 1,344 660 0 21,741 (0) (41) SHAREHOLDERS' EQUITY FY13 in AFS RESERVE 1Q 2014 NET RESULTS DIVIDEND OTHER SHAREHOLDERS EQUITY 1Q14 2,513 83 1,216 45 3,857 AFS RESERVE FY13 IMPACT EQUITY INVESTMENT IMPACT BOND INVESTMENTS OTHER AFS RESERVE 1Q14 8. Generali May 15, 2014 1Q 2014 Results 8 Solvency I Capital +11%pts. Solvency I rollforward (%) 141% 0%pts 4%pts 7%pts 152% SOLVENCY I FY13 REQUIRED MARGIN GROWTH CONSOLIDATED RESULT FINANCIAL MARKETS AND OTHER SOLVENCY I 1Q14 (1) (1) For interim closings, no accrued dividends are deducted from available margin. 9. Generali May 15, 2014 1Q 2014 Results 9 Debt refinancing operations completed Financing until 2016 call dates completed; 1 bn net reduction in debt levels by end 2015 Leverage 12.8 1.3 14.0 (0.5) 1.0 (2.3) 12.3 (0.5) 11.8 FY13 SENIOR BOND ISSUED JAN 2014 1Q14 REPAYMENT OF INELIGIBLE LOAN SUB DEBT ISSUE MAY 2014 2014 MATURITIES EXPECTED FY14 2015 MATURITIES EXPECTED FY15 ( bn) Advantage taken of market conditions to pre-finance until 2016 call dates: 1.25 bn senior debt issued in January, with 2.25 bn senior maturing this year (remainder financed from internal resources, in excess of 1/3rd target) 1.0 bn subordinated bond issued in May to 1) Replace 500 m ineligible loan at year end, and 2) Pre- finance 2015 maturities of 0.5 bn. Net 1 bn improvement in debt position expected by 2015, with lower interest expenses ( 60 m) 10. Generali May 15, 2014 1Q 2014 Results Agenda II. Business review 10 11. Generali May 15, 2014 1Q 2014 Results ( m) 1Q13 1Q14 LFL D Gross written premiums 11,860 12,061 +2.4% Net inflows 2,810 2,888 +4.3% Life operating result 781 779 -0.2% Life operating ratio on investments (bps) 24 22 -2 APE 1,213 1,270 +5.4% New Business Value 254 320 +35.2% Margins on APE (%) 20.9% 25.2% +5.2%pts. 11 Life key financial indicators Life Insurance 12. Generali May 15, 2014 1Q 2014 Results 781 29 85 779 (116) 1Q13 TECHNICAL MARGIN INVESTMENT RESULT EXPENSES 1Q14 12 Life Operating result by driver Life Insurance 1Q14 1,384 546 (1,151) 1Q13 1,500 517 (1,236) D % -7.7% +5.7% -6.9% Stable thanks to increasing investment result and decreasing expense ratio Technical margin lower due to policyholder share of lower expenses, and lower risk result Overall operating profit margin stable 22 bp of investments ( m) -0.2% 13. Generali May 15, 2014 1Q 2014 Results 13 Life inflows and technical reserves(1) Life Insurance (1) Including liabilities related to investment contracts ( m) 1Q13 1Q14 Italy 212 1,070 France 70 (224) Germany 1,494 821 CEE 143 130 EMEA 671 949 Lat. Am. 88 58 Asia 111 63 International 21 23 TOTAL 2,810 2,888 Increase in net inflows (+4.3%) Notable improvements in Italy and EMEA Decrease in Germany due to planned reduction of single premiums Overall growth in reserves of 1.5% + 1.5% + 2.7% + 1.2% Unit linked Traditional ( bn) 266.4 2.9 3.6 269.6 58.9 60.5 325.3 330.1 (1.4) (0.3) FY13 NET INFLOWS LOADINGS, RISK & SURRENDER RESULT POLICYH. SHARE OF INVEST. RESULT EXCHANGE RATES & OTHER 1Q14 14. Generali May 15, 2014 1Q 2014 Results 14 Life investment performance Life Insurance Life segment own investments (%) Euro 282.4 bn Euro 294.6 bn (1) Net of depreciation expenses. 43.3% 44.1% 34.6% 34.4% 8.1% 8.9% 4.7% 4.4% 3.5% 3.4% 3.8% 3.0% 1.9% 1.9% FY13 1Q14 Other Cash & cash equivalent Real estate Equity Other fixed income Corporate bonds Government bonds Euro m % Fixed income 1Q13 2,225 0.96 1Q14 2,274 0.91 Equity 1Q13 17 0.14 1Q14 91 0.70 Real Estate(1) 1Q13 151 1.55 1Q14 147 1.48 Total(1) 1Q13 2,474 0.90 1Q14 2,592 0.90 Current returns (not annualized) 15. Generali May 15, 2014 1Q 2014 Results Positive development of APE (+5.4%) with good progressions of both annual and single premiums. NBM improves (+5.2%pts. on homogeneous basis) thanks to the more favourable economic assumptions and to the further reduction of guarantees in Euro area (from 1.15% at FY13 to 0.97% at 1Q14). Solid NBV at Euro 320 m (+35.2%). 15 Life new business analysis Life Insurance ( m) APE NBV MARGIN ON APE 1Q13 1Q14 LFL r 1Q13 1Q14 LFL r 1Q13 1Q14 LFL r Italy 401 571 +42.6% 66 141 +114.6% 16.5% 24.7% +8.3%pts France 248 222 -10.5% 36 34 -6.0% 14.4% 15.2% +0.7%pts Germany 303 204 -34.9% 72 66 -10.7% 23.7% 32.6% +8.8%pts CEE 36 32 -2.6% 16 12 -11.5% 44.7% 38.4% -3.9%pts EMEA 169 198 +13.5% 43 60 +37.7% 25.5% 30.2% +5.3%pts Lat. Am & Asia 56 42 +21.4% 20 6 +103.8% 36.2% 15.1% -4.9%pts Total 1,213 1,270 +5.4% 254 320 +35.2% 20.9% 25.2% +5.2%pts 16. Generali May 15, 2014 1Q 2014 Results 16 P&C key financial Indicators P&C Insurance ( m) 1Q13 1Q14 LFL D Gross written premiums, of which: Primary Motor Primary Non Motor 6,555 2,797 3,575 6,416 2,702 3,569 -0.1% +0.0% +0.8% Combined ratio (%) 93.6% 92.7% -0.8%pts. Of which: Nat Cat impact (%) 0.0% 0.6% +0.6%pts. P&C operating result 498 516 +3.7% 17. Generali May 15, 2014 1Q 2014 Results 498 14 4 1 516 1Q13 TECHNICAL MARGIN INVESTMENT RESULT OTHER 1Q14 17 P&C Operating result by driver P&C Insurance 1Q14 336 234 (54) 1Q13 323 230 (55) D % +4.2% +1.7% -1.6% Improving result, despite higher Nat Cat impact, reflecting better underlying underwriting margins ( m) +3.7% 18. Generali May 15, 2014 1Q 2014 Results ( m) 1Q13 1Q14 LFL r Italy 1,524 1,464 -4.0% France 922 869 -5.8% Germany 1,443 1,460 +1.2% CEE 534 515 +0.6% EMEA 1,559 1,553 -0.3% Lat Am 271 274 +40.4% Asia 23 24 +6.7% International 277 257 -7.2% Total 6,555 6,416 -0.1% 18 P&C gross written premiums trends P&C Insurance Overall stable premium development: Decline in Italy primarily driven by Motor. Also Non-Motor decreased due to Commercial and Accident/Health that more than offset improvement in Personal lines Decline in France driven by both Motor and Non- Motor due to a competitive market environment and strict underwriting guidelines Improvement in Germany thanks to Non-Motor (driven by Personal and Commercial) that more than offset a slight decrease in Motor Significant increase in Latin America (on like for like basis), driven by Brazil and Argentina (reflecting inflation) 19. Generali May 15, 2014 1Q 2014 Results 66.1 0.6 65.7 (0.3) (0.8) 1Q13 Current year NATCAT Prior years 1Q14 66.1 65.7 27.4 27.0 (0.4)(0.4) 93.6 92.7 1Q13 Expense ratio Loss ratio 1Q14 21.6 21.3 5.9 5.7(0.2) 27.4 27.0 1Q13 Admin Acq. 1Q14 (0.2) 19 Combined ratio analysis P&C Insurance Combined ratio (%) Loss ratio Expense ratio Expense ratio (%) %pts - 0.4%pts. 1Q14 69.2 0.6 -4.0 65.7 1Q13 69.4 0.0 -3.3 66.1 Loss ratio (%) - 0.4%pts. - 0.8%pts. Acquisition costs Administr. costs 20. Generali May 15, 2014 1Q 2014 Results 20 Combined ratio by country P&C Insurance Combined Ratio still improving in Italy, thanks to current year loss ratio, despite Nat Cat impact (+0.9%pts.) Nat Cat strongly impact Combined Ratio in France (+2.7%pts.) CEE further improving COUNTRY 1Q13 1Q14 Italy 92.0% 90.6% -1.5%pts. France 97.2% 103.1% +6.0%pts. Germany 93.8% 94.0% +0.2%pts. CEE 84.4% 81.8% -2.6%pts. EMEA 95.3% 94.9% -0.4%pts. Lat Am 99.6% 102.0% +2.5%pts. Asia 233.1% 110.0% n.m. International 86.5% 76.2% -10.3%pts. Total 93.6% 92.7% -0.8%pts. 21. Generali May 15, 2014 1Q 2014 Results 21 P&C investment performance P&C Insurance P&C segment own investments (%) Euro 37.7 bn Euro 40.3 bn 29.1% 24.9% 30.2% 30.4% 6.5% 10.6% 9.9% 8.8% 13.1% 12.3% 10.0% 12.1% 1.1% 0.9% FY13 1Q14 Other Cash & cash equivalent Real estate Equity Other fixed income Corporate bonds Government bonds (1) Net