Generali, record accounts: profits at 2.9 billion. Donnet: more dividends -

Generali, record accounts: profits at 2.9 billion.  Donnet: more dividends -

With an operating result of 6.5 billion, up 11.2%, the Generali group closes a record balance sheet which in 2022 also saw net profit rise by 2.3% to 2.9 billion. A level which, without the impact of investments in Russia, would have exceeded 3 billion. The boost came from 81.5 billion in premium income driven by the life sector and the momentum of the non-life business (+9.8%), especially in the non-motor sector. Numbers that have allowed the company led by CEO Philippe Donnet to propose a dividend of 1.16 euros, an increase of 8.4%, respecting the pace set by the Lifetime Partner 24 plan which aims for a distribution of 5.2-5.6 billion in cash dividends up to 2024, compared to the previous 4.5, in constant growth since Donnet's arrival at the top of the Lion in 2016, today at the end of the first year of his third term as CEO.

Debt reduction, profitability increase

Philippe Donnet

The excellent profitability and the solid capital position allow us to raise shareholder remuneration - said Donnet -, part of the transformation path, of sustainable growth, of our social role and of the creation of a business model diversified in geography and activity , which creates value according to the plan. And this despite all the crises of recent years. Debt reduction, increased profitability, innovation, sustainability, value for shareholders, with the stock growing by 58% - and a return for shareholders of 123% - are the cards played by Donnet to solidify the group's business which records a Solvency Ratio of 221% (202 in 2015) which, updated to Friday 10 March, stands at around 230% as underlined by the CFO Cristiano Borean.

Above market estimates

The company then lightened the weight of government bonds with BTPs dropped from 63 to 44.3 billion as part of the liability management policy strategy. The operating result of the life segment grew sharply to 3.5 billion (+25.1%), driven by health risk and unit-linked policies with technical profitability, also confirmed by the margin on new premiums at 5.35%. The operating result in non-life business also increased, amounting to 2.7 billion (+1.7%). The Combined Ratio stands at 93.2%, driven by the higher number of claims and the increase in their costs with inflation. The Lion beat the estimates of the market and of the company's top management. The filigree reading by the market of the accounts gave wings to the title which closed up by 3.6%.

M&A in insurance between Europe and Asia

The drop in shareholders' equity to 16.201 billion (-44.7%) due to the reserves available for sale, following the performance of bonds, said the Lion. Who explained how with the new IFRS 17 standards, investments - which are now suffering from market volatility - will also be valued at fair value, like liabilities from the first quarter of this year. The hypothesis of the sale of portfolios in the life sector, hypothesized only a few months ago, is slowing down. The rate hike has imposed less urgency on a business that has changed. While not being worried doesn't mean not being careful, said Donnet who confirmed that he is looking at M&A in insurance across Europe and Asia and in asset management seeks globally. As for the crisis unleashed in the US by the crash of the Silicon Valley Bank, the key is the congruence between liabilities towards policyholders and assets - said Donnet - and in Generali this almost perfect match. If there is a rush to earnings, these must be shared with the policyholders, which represents a strong cushion for this volatility. However, the problem of a regional bank in the US allows us to sleep at night.

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