Generali Group 1Q 2009 Results

Milan, May 13, 2009

Generali Group 1Q 2009 Results

Assicurazioni Generali Group – 1Q 2009 results

2Agenda

I. Overview

II. Group financials

III. Final remarks

IV. Backup


3Agenda

I. Overview1Q 2009 results at a glance


41Q 2009 results

at a glance

(Euro m)

1Q 2008 1Q 2009 Δ

historical (%)

Operating

Result 1,155 1,009 -12.7%

Net Result 910 104 -88.6%

FY 2008 1Q 2009 Δ

historical (%)

Shareholders’

Equity 11,313 11,013 -2.7%

I. OVERVIEW


5Agenda

II. Group financialsProfit & loss review

Shareholders’

equity

Life & P&C profitability


6Revenues

development

by

segmentII. GROUP FINANCIALS

(Euro m)

1Q 2008

1Q 2009

∆

historical(%)

∆

like for like(1)

(%)

Gross written premiums 18,429 18,479 +0.3 -2.7

Life(2) 12,058 11,889 -1.4 -3.7

P&C 6,371 6,590 3.4 -0.8

(1) Calculated considering equivalent exchange rates and scope of consolidation(2) Including investment contracts for Euro 606.6 m in 1Q 2009 and Euro 410.3 m in 1Q 2008


7

1,008.9

-32.5

-62.7

92.4

448.9

562.9

1,155.3

-18.0

-71.2

89.8

568.7

586.1

-80.4Consolidation adjustments

-12.7Total operating result

+2.9Financial services operating result

-21.1P&C

operating result

+12.0Operating holdingexpenses

-4.0Life operating result

1Q09

1Q08

historical (%)

Operating result by segment (Euro m)

Operating result by segmentII. GROUP FINANCIALS

Impairments: Euro 1 bn

(1) 1Q 2008 operating

result

has

been

restated

to

conform

to

the current

definition

of

the operating

result

(refer

to

the Appendix

of

the Consolidated

Report Methodology

Note on Alternative Performance Measures)

(1)


8From operating result to net result

(Euro m) 1Q 2008 1Q 2009 (%)

Total operating result 1,155.3 1,008.9 -12.7

Non operating investment income 341.3 (521.8)

Of which impairments (25.8) (513.1)

Non-operating holding expenses (171.8) (172.4)

Interest expenses on financial debt (166.3) (165.2)

Other non-operating holding expenses (5.5) (7.2)

Net other non operating expenses (15.4) (93.7)

Total non operating result 154.1 (787.8) n.m.

Consolidated result of the period before taxes and minority interests

1,309.4 221.1 -83.1

Income taxes (314.9) (62.3)

Minority interests (84.2) (55.1)

Net result of the period 910.3 103.8 -88.6

II. GROUP FINANCIALS

(1) 1Q 2008 operating

result

has

been

restated

to

conform

to

the current

definition

of

the operating

result

(refer

to

Appendix

to

the Consolidated

Report ‘Methodology

Note on Alternative Performance Measures)

(1)


9

(1,213)(46)(1,106) (257)

196

11,313

(107)11,013

(43)

104

(132) (122)

IFRS Shareholders’

equity roll forward

Shareholders’

Equity FY08

Δ

in AFS Reserve

1Q 2009Net Result

Δ

Currency

Translation

Reserve

Δ

Cash Flow Hedge Reserve

Other Shareholders’

Equity 1Q09

-2.7%


AFS Reserve FY08

Impact Equity Investments

Impact Bond Investments

Other AFS Reserve 1Q09

IFRS Shareholders’

equity roll forward (Euro m)

Change in AFS reserve (Euro m)


10Investment(1)

portfolio

Fixed

income

81.7%

Other(2)

6.6%

Real Estate(3)

5.1%

Equity

6.6%

(1) Own investments Including

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) Including real estate mutual funds

Own

investments

(Euro 286.1 bn)


In this macro economic environment, the risk profile of our investments remains prudent

Government bonds represent 56.5% of total bond portfolio

Equity exposure net of hedging: 4.7%

No further commitments in Alternative Investments expected in the short term


11Life & Health: New Business Annual Premium Equivalent

Limited APE contraction: -6.0% on a like for like basis, net of 2008 “Riester-step”

in Germany


1Q 2008

1Q 2009

Historical%

Like for like(1)

%

Italy 334 301 -9.6 -9.6

France 355 329 -7.4 -7.2

Germany 369 278 -24.7 -30.4

CEE 49 37 -26.1 -6.7

RoW 258 251 -2.5 -4.4

Total 1,365 1,196 -12.4 -13.5

Italy: positive development in traditional annual premiums offset by a planned decrease in low margin single premium products sold via Financial Advisors channel.

France: slowdown of unit-linked business partially offset by positive development of traditional single premium business (+4.4%).

Germany: normalizing the impact of one-off “Riester-step” effect in 2008, APE decreases by only -1.2%.

CEE: negative performance (-6.7% on a like for like basis) due to adverse market conditions.

Rest of World: excellent growth in Far East and USA (respectively +116.4% and +28.3% on a like for like basis) offsetting negative development in other countries.

(Euro m)

(1) Neutralizing impacts of variations in exchange rates and scope of consolidation


12

586.1 562.9

Life profitability

Life operating result

(Euro m)

1Q091Q08

-4.0%


Life Operating result by market (Euro m)

1Q 2008 1Q 2009 %

Italy 310.6 273.0 -12.1

France 164.5 103.5 -37.1

Germany 71.2 49.5 -30.5

CEE 5.4 93.0 n.a.(1)

RoW 34.4 43.9 +27.9

Total 586.1 562.9 -4.0

(EUR m) FY 2008 1Q 2009 %

Life Net Tech. Reserves(2) 283,305 284,259 +0.3

traditional 241,433 243,982 +1.1

linked 41,872 40,277 -3.8(2) Including

investment contracts

1Q09 net inflow(3)

amount

to

Euro 3.2 bn

(3) Net inflow: premiums

written

in the period

less

surrenders

and maturity. It

does

not

include revaluation

of

mathematical

reserves

(1) +79.3% on like for like basis


13P&C Gross Written Premiums

We preserved production despite challenging markets


1Q2008 1Q 2009Historical

%Like

for

like(1)

%Italy 1,800.0 1,702.6 -5.4 -5.4

France 1,147.0 1,164.0 1.5 1.5

Germany 1,329.7 1,311.5 -1.4 -1.4

CEE 308.2 575.4 86.7 0.1

RoW 1,786.3 1,836.7 2.8 2.4

Total 6,371.2 6,590.1 3.4 -0.8

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

(Euro m) Italy: continuing negative trend in motor business (decrease of new vehicles matriculations around 19% in first quarter); confirmed dynamism in retail lines but middle market and corporate lines affected by negative economic situation

France: in-the-market premium growth, despite continued pruning in non profitable motor portfolios (-3.3%), offset by solid growth in all non-motor lines of business, particularly retail (Personal +3.9%, Accident & health +3.8%) and middle segment

Germany: slight decrease due to seasonal concentration of motor renewal campaign affected by further strong price competition (-4,2%). Steady growth trend (+1,8%) in profitable non-motor lines, despite economic recession


14P&C profitability –

net combined ratio

2.80.4

1Q091Q08

Combined ratio (%)

Expense ratio

Loss ratio

+3.2 pts.


Combined ratio by country

(%)

1Q 2008 1Q 2009 %pts

Italy(1) 91.0 96.7 +5.7

France 95.8 100.6 +4.8

Germany 95.7 96.5 +0.8

CEE 94.9 85.9 -9.0

RoW 92.0 96.7 +4.7

Total 93.1 96.3 +3.2

(1) Excluding foreign branches

27.5

68.8

27.1

66.0

96.393.1

Loss

ratio Expense

ratio


15

448.9568.7

P&C profitability –

operating result

P&C operating result

(Euro m)

1Q091Q08

-21.1%


P&C Operating result by market (Euro m)

1Q 2008 1Q 2009 ∆%

Italy 212.0 109.9 -48.1

France 96.9 51.6 -46.8

Germany 67.2 66.4 -1.1

CEE 21.6 106.8 n.a.(1)

RoW 171.1 114.1 -33.3

Total 568.7 448.9 -21.1

(1) +22.3% on like for like basis


16

III. Final Remarks

Agenda


17Final remarks

Strong focus on operational improvement and efficiency programs

III. FINAL REMARKS

Proactive tariff management to preserve P&C profitability

Prudent investment policy, with careful monitoring of market evolution


18Agenda

IV. Backup


191Q09 total gross written premiums

(Euro m) Total Gross Written Premiums

Country GWPYoY

increase

% weight

(2)

Italy 4,991 -8.1 27.0

France 4,319 -5.5 23.4

Germany 4,344 +4.1 23.5

Eastern Europe 939 -1.4 5.1

RoW 3,886 +0.8 21.0

Of which:

Spain 842 +1.0 4.6

Austria 766 +0.7 4.1

Switzerland 510 -0.6 2.8

Total 18,479 -2.7 100.0

Gross Life Written Premiums(1)

GWPYoY

increase % weight

(2)

3,288 -9.5 17.8

3,155 -7.9 17.1

3,032 +6.6 16.4

364 -3.6 2.0

2,050 -0.7 11.1

Of which:

357 +8.8 1.9

289 +0.6 1.6

203 -4.2 1.1

11,889 -3.7 64.3

Gross P&C Written Premiums

GWPYoY

increase % weight

(2)

1,703 -5.4 9.2

1,164 +1.5 6.3

1,312 -1.4 7.1

575 +0.1 3.1

1,836 2.4 9.9

Of which:

485 -4.2 2.6

476 +0.8 2.6

308 +1.9 1.7

6,590 -0.8 35.7

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

IV. BACK UP


20Life premiums by country & business line

Life 1Q09(Euro m)

TraditionalUnit/index

linked Health Group Total

Italy 79.0% 11.7% 0.0% 9.3% 3,265.1

France 78.3% 9.0% 6.5% 6.2% 3,116.3

Germany 50.7% 25.0% 16.9% 7.4% 3,031.5

Eastern Europe 68.0% 19.6% 10.5% 1.9% 363.9

RoW 41.7% 18.5% 7.1% 32.7% 1,899.6

Of which:

Spain 48.5% 1.4% 0.0% 50.1% 356.8

Austria 50.5% 29.3% 19.0% 1.1% 286.2

Switzerland 21.7% 76.9% 1.2% 0.2% 202.5

Total life gross direct premiums

65.1% 15.8% 7.6% 11.6% 11,676.4

IV. BACK UP


21P&C premiums by country & business line

P&C 1Q09(Euro m)

Motor(1)Accident/

HealthOther

personal Commercial Total

Italy 47.3% 18.2% 11.6% 22.8% 1,678.3

France 28.8% 11.0% 34.2% 26.1% 1,102.8

Germany 49.6% 9.5% 31.4% 9.5% 1,310.0

Eastern Europe 54.4% 9.0% 13.8% 22.8% 570.9

RoW 44.0% 13.5% 12.9% 29.5% 1,789.2

Of which:

Spain 29.0% 14.8% 16.0% 40.2% 485.3

Austria 43.6% 8.6% 13.4% 34.5% 456.3

Switzerland 59.1% 24.7% 16.1% 0.2% 305.6

Total P&C gross direct premiums

44.3% 13.1% 20.0% 22.5% 6,451.1

IV. BACK UP

(1) Including

fleets


22Life & Health: New Business Annual Premium Equivalent

1Q 2008 1Q 2009Historical

%Like for like(1)

%

Italy 334 301 -9.6 -9.6

France 355 329 -7.4 -7.2

Germany 369 278 -24.7 -30.4

CEE 49 37 -26.1 -6.7

RoW 258 251 -2.5 -4.4

of which: Spain 34 36 +6.3 +6.3

of which: Austria 21 19 -8.4 -8.4

of which: Switzerland 19 20 +1.5 -2.2

Total 1,365 1,196 -12.4 -13.5

(Euro m)

IV. BACK UP

(1) Neutralizing impacts of variations in exchange rates and scope of consolidation


23

Loss ratio

Expense

ratio

Life –

Expense ratio (%) P&C –

Combined ratio

(%)

Total –

Expense ratio (%)

68.866.0

27.1 27.5

15.8 16.0

11.3 11.1

1Q091Q08

1Q091Q08

1Q091Q08

93.1 96.3

RatiosIV. BACK UP


24Ratios by country

P&C ratios by country (%)

ITA FRA GER CEE SPA AUT SWI Consolidated

Loss ratio

1Q09 74.8 73.4 67.4 56.0 67.0 67.1 70.1 68.8

1Q08 69.2 69.4 65.9 63.6 61.7 68.2 71.7 66.0

Expense ratio

1Q09 21.9 27.1 29.1 29.8 24.1 31.3 25.0 27.5

1Q08 21.8 26.3 29.8 31.3 23.0 31.4 23.8 27.1

Combined

ratio

1Q09 96.7 100.6 96.5 85.9 91.1 98.4 95.1 96.3

1Q08 91.0 95.8 95.7 94.9 84.7 99.6 95.5 93.1

Life expense

ratios

by

country

(%)

1Q09 9.3 7.1 15.3 20.0 4.3 13.7 20.9 11.1

1Q08 9.2 6.8 17.3 26.2 4.4 15.0 22.9 11.3

IV. BACK UP


25Combined ratio reconciliation

1Q 2008 1Q 2009A Net earned premiums (net of consolidation adjustments) 4,780.0 5,012.7

B Consolidated net claims 3,156.8 3,449.1

Consolidated acquisition costs 1,011.7 1,076.3

Consolidated administration costs 303.8 316.2

Non insurance activity related administration costs(1) 22.3 15.5

Insurance activity related consolidated administration costs 281.5 300.7

C Total acquisition and administration costs 1,293.2 1,377.0

B/A Loss ratio 66.0% 68.8%

C/A Expense ratio 27.1% 27.5%

(B+C)/A Combined ratio 93.1% 96.3%(1) Administration expenses related to service companies, real estate and other companies not belonging to P&C segment

(Euro m)

IV. BACK UP


26Operating

result

by

country

P&C operating result by market

(Euro m)Life operating result by market

(Euro m)

1Q08 1Q09 %

Italy 310.4 273.0 -12.0

France 164.5 103.5 -37.1

Germany 71.2 49.5 -30.5

CEE 5.4 93.0 n.a.(1)

RoW 34.6 43.9 +26.9

Of which:

Spain 23.1 24.6 +6.5

Austria 3.1 4.5 +48.0

Switzerland 2.3 13.0 +456.8

Total 586.1 562.9 -4.0

1Q08 1Q09 %

Italy 212.0 109.9 -48.2

France 96.9 51.6 -46.7

Germany 67.2 66.4 -1.2

CEE 21.6 106.8 n.a.(1)

RoW 171.0 114.2 -33.2

Of which:

Spain 71.2 53.1 -25.4

Austria 14.8 13.5 -8.8

Switzerland 17.6 10.5 -40.4

Total 568.7 448.9 -21.1

IV. BACK UP

(1) +79.3% on like for like basis (1) +22.3% on like for like basis


27Reclassified P&L account

(Euro m) Total1Q 2008 1Q 2009

Operating result(1) 1,155.3 1,008.9Net earned premiums 16,257.2 16,129.1Net insurance benefits and claims (11,436.1) (13,216.6)Acquisition and administration costs (2,787.7) (2,842.2)Net fee and commission income and net income from financial service activities 184.8 149.9Operating income from investments (840.4) 961.7Operating holding expenses (71.2) (62.7)Net other operating expenses (151.2) (110.2)

Non-operating result(1) 154.1 (787.8)Non-operating income from investments 341.3 (521.8)Non-operating holding expenses (171.8) (172.4)

Interest expenses on financial debt (166.3) (165.2)

Other non-operating holding expenses (5.5) (7.2)

Net other non-operating expenses (15.4) (93.7)Earnings before taxes 1,309.4 221.1Income taxes (314.9) (62.3)Consolidated result of the period 994.5 158.9Result of the period attributable to minority interests (84.2) (55.1)Group result of the period 910.3 103.8

IV. BACK UP

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


28

(Euro m) Life Non life Financial(2)

Unallocated holding

expensesConsolidation

adjustments Total

Operating result(1) 586.1 568.7 89.8 (71.2) (18.0) 1,155.3

Net earned premiums 11,477.1 4,780.1 0.0 - - 16,257.2

Net insurance benefits and claims (8,279.4) (3,156.7) 0.0 - - (11,436.1)

Acquisition and administration costs (1,314.1) (1,315.5) (157.9) - (0.2) (2,787.7)

Net fee and commission income and net income from financial service activities 23.8 0.0 172.9 - (12.0) 184.8

Operating income from investments (1,281.0) 346.3 90.5 - 3.8 (840.4)

Operating holding expenses - - - (71.2) - (71.2)

Net other operating expenses (40.3) (85.4) (15.8) - (9.7) (151.2)

Non-operating result(1) (15.9) 344.8 (2.9) (171.8) - 154.1

Non-operating income from investments 1.1 332.5 7.8 - - 341.3

Non-operating holding expenses - - - (171.8) - (171.8)

Net other non-operating expenses (17.0) 12.3 (10.7) - - (15.4)

Earnings before taxes 570.2 913.4 86.8 (243.0) (18.0) 1,309.4

Reclassified P&L account by segment –

1Q 2008IV. BACK UP

(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


29

(Euro m) Life Non life Financial(2)

Unallocated holding

expensesConsolidation

adjustments Total

Operating result(1) 562.9 448.9 92.4 (62.7) (32.5) 1,008.9

Net earned premiums 11,116.4 5,012.7 0.0 - - 16,129.1

Net insurance benefits and claims (9,767.5) (3,449.1) 0.0 - - (13,216.6)

Acquisition and administration costs (1,281.8) (1,392.5) (167.9) - - (2,842.2)

Net fee and commission income and net income from financial service activities 7.5 (0.1) 166.0 - (23.5) 149.9

Operating income from investments 532.9 316.1 122.1 - (9.4) 961.7

Operating holding expenses - - - (62.7) - (62.7)

Net other operating expenses (44.6) (38.2) (27.8) - 0.3 (110.2)

Non-operating result(1) (112.2) (484.4) (18.8) (172.4) - (787.8)

Non-operating income from investments (82.0) (439.8) (0.1) - - (521.8)

Non-operating holding expenses - - - (172.4) - (172.4)

Net other non-operating expenses (30.3) (44.6) (18.7) - - (93.7)

Earnings before taxes 450.6 (35.5) 73.6 (235.0) (32.5) 221.1

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


30Investments

(Euro m) FY08 % on total 1Q09 % on totalReal Estate(1) 12,473 3.8 12,383 3.8

Group Participations 2,568 0.8 2,555 0.8

Loans(2) 69,193 21.2 85,476 26.2

Held to maturity 1,798 0.5 1,974 0.6

Available for sale 173,701 53.1 159,668 48.9

Fin. Instr. at fair value thr. P&L 67,402 20.6 64,386 19.7

Total investments 327,135 100.0 326,431 100.0(1) Excluding real estate mutual funds(2) €

14.7 bn

corporate bonds (which have A average rating, are listed in an inactive market and Generali Group has the intention and the ability to hold for a foreseeable future) were transferred from mainly “Available for Sale”

category to “Loans”

category

IV. BACK UP


31

286.1

40.4

67.2

285.8

41.4

68.6

Assets Under Management

395.8

Fixed

income

instruments

(2)

81.7%

Other

(3)

6.6%

Real Estate

(4)

5.1%

Equity

6.6%

(1) “Own Investments”

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

would amount to €

289.4 bn, compared to €

289.0 bn

at the end of 2008

Unit

Linked

Third

parties

AUM

“Own

Investments”

(1)

(4) Including real estate mutual funds

FY08 1Q09

(Euro bn)

393.7-0.5%

(3) Including

investments

in subsidiaries, associated

companies

and JVs, derivatives, receivables

from

banks

or customers

(2) Including

mortgage

loans, policy loans, deposits

under reinsurance

business accepted, term

deposits

with

credit

institutions

and other

financial

investments, other

loans

IV. BACK UP


32What’s next

July 31,

2009

-

1H 2009

Results (Conference call presentation)

November 5,

2009 –

9M 2009

Results (Conference call presentation)


33Investor Relations Team

Stefano Burrino

(Tel.: +39-040-671202)IR Manager

Email: [email protected]

Veronica Cherini

(Tel.: +39-040-671488)Jr. IR Manager


www.generali.com

Tel.: +39 040 671402 Fax: +39 040 671338 e-mail: [email protected]

Emanuele Marciante

(Tel.: +39-040-671347)IR Manager


Nicoletta Mendes

(Tel.: +39-040-671402)Team Assistant


Paola Buratti Head of Investor Relations

(Tel.: +39-040-671157)


Assicurazioni Generali P.za Duca degli Abruzzi 2 34132 Trieste, Italy


34Disclaimer

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 13, 2009

Generali Group 1Q 2009 Results

Generali Group 1Q 2009 Results

Business

Transcript of Generali Group 1Q 2009 Results