Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Generali (ARZGF, Financial) reported a 1.6% increase in operating results, reaching over EUR3.7 billion, driven by strong performance in the Life, Asset Management, and Wealth Management sectors.
- The company's total assets under management rose by 25.2% to EUR821 billion, largely due to the inclusion of Conning and its affiliates.
- Generali (ARZGF) achieved over EUR5.1 billion in positive net inflows in the Life business, driven by protection and unit-linked products.
- The Property & Casualty segment saw a 10.5% increase in premiums, with a stable frequency and improving claims inflation across markets.
- Generali (ARZGF) announced a EUR500 million share buyback, reflecting a commitment to balancing shareholder remuneration with M&A activities.
Negative Points
- The adjusted net result decreased by 13.1% to EUR2 billion, primarily due to capital gains and one-offs recorded in the previous period.
- The Solvency 2 position was impacted by a 9-percentage-point deduction from the acquisition of Liberty Seguros and a 2-percentage-point deduction from share buybacks.
- The Life business experienced a significant reduction in saving outflows, indicating potential challenges in maintaining inflow momentum.
- The combined ratio guidance for Property & Casualty remains below 96%, but the impact of natural catastrophes and other factors could pose risks.
- The investment yields in Life and P&C sectors decreased compared to last year, reflecting lower market yields, especially in European credit and China.
Q & A Highlights
Q: Can you comment on Liberty's combined ratio performance and its sustainability?
A: (Cristiano Borean, Group CFO) Liberty reported a combined ratio of 94.10% for the first half, benefiting from no Nat Cats or man-made losses. This performance includes a valuation-driven effect from purchase price allocation, which is expected to continue over the duration of the liabilities.
Q: Could you elaborate on the impact of the Milan tables on your numbers and pricing?
A: (Giulio Terzariol, CEO of Insurance) The Milan tables were anticipated, and we had already prepared for potential increases in inflation. We prudently added about 1-percentage-point to the combined ratio in Italy for the Milan tables, although our reserves were already sufficient to offset the impact.
Q: What is the current lapse environment, particularly in Italy?
A: (Marco Maria Sesana, General Manager) Lapses in Italy remain high but are on a better trajectory. We are seeing improvements in France, and the situation in Italy is expected to improve as financial conditions stabilize.
Q: Can you discuss the strategic importance of the Asset Management business for Generali?
A: (Philippe Donnet, Group CEO) Asset Management is strategic for Generali as it complements our Life insurance business. We aim to become a leading insurance asset manager, leveraging synergies between Life insurance and Asset Management to enhance customer-centric services and increase third-party business.
Q: What are your expectations for yearly cash generation and remittances?
A: (Cristiano Borean, Group CFO) We expect yearly cash remittances to generate more than EUR900 million to EUR1 billion in excess cash after dividends. This cash is primarily allocated to dividend growth and capital allocation, balancing M&A and shareholder remuneration.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
