Generali reorganises life portfolio, hypothesised asset sale for 20 billion - Corriere.it
A review of the business that goes through an optimization of the old Life portfolios. Valuing those that absorb more capital, therefore more expensive. For example, the products stipulated over twenty years ago when the returns for customers were much higher, driven by rates that were even double the current ones. The Generali group is reportedly working on it and, in order to improve the operating result, is considering the sale of an all-Italian portfolio worth about 20 billion in life insurance reserves, which compares with the 424 billion in life technical reserves of the group in 2021. According to Bloomberg, the Lion would have opened the dossier, supported by an advisor, to start a sale process in January. The perimeter would include life policies of Cattolica which is integrating with Trieste. The under-the-radar profile would also include some portfolios still in Genertel's Vita. These are figures that will be updated in the event that the Lion decides to open a due diligence. And which must also be established according to the market. Who will buy? Potential buyers are specialized companies. The operation - over which the CEO Philippe Donnet has full powers - could be illustrated in the board meeting on Thursday 15th.
As in the industrial plan
an operation that the Lion does not confirm, but which seems consistent with the 2024 plan drawn up by the CEO a year ago. The project focuses on m&a but also wants to free up resources, improve income profiles by reorganizing the existing portfolio, focus more on the non-life segment. In the Life segment, the group will continue to develop products with low capital absorption and technical profitability. Generali will continue to improve the profitability of the Life business, continuing the process of optimizing portfolios to reduce capital absorption, says Donnet's plan. If it goes through, the operation will follow the script of Leben in Germany closed in 2019, 37 billion of reserves sold for 2 billion, with the advantage for the Lion to get rid of high yields. And investing with a higher return. Not to mention that the Lion would free up capital by increasing Solvency and then reducing the volatility risk. Even if this alienation would result in a loss of customers. Viridium, specialized in the management of Life policies, had bought in Germany. Generali had been the first to carry out a sale of this type, taking a path later followed by Axa and Zurich. The buyers of these portfolios are often specialist investors or reinsurers. Who could now also evaluate the Italian portfolio, the gain for could be slightly lower than the German operation. Meanwhile, yesterday Msci, one of the main ESG rating companies, raised Generali's rating from AA to AAA.
