The Group non-operating result stood at EUR -1,581 million (FY2018: EUR -1,361 million) and includes the gross one-off expense of EUR 245 million from the liability management transaction regarding the buyback of subordinated notes.
Net profit grew by 15.7% to EUR 2,670 million and reflects the improvement of the operating result as well as the contribution from the operations that are in the process of being sold or were sold. Adjusted net profit, which does not include the impact of gains and losses related to disposals for a total of EUR 475 million, reached EUR 2,191 million. Excluding the one-off net expense of EUR 188 million for the above-mentioned liability management transaction, the adjusted net profit was EUR 2,379 million, with an increase of 6.6%.
Generali FY2019 consolidated figures, y-o-y changes
- Gross written premiums: EUR 69,785 million (+4.3%), of which:
- Life: EUR 48,260 million (+4.5%)
- P&C: EUR 21,526 million (+3.9%)
- Assets under management: EUR 630 billion (+29.0%)
- Life Technical Reserves: EUR 369 billion (+7.6%)
- Life net inflows: EUR 13,632 million (+19.6%)
- Life NBV: EUR 1,777 million (-5.3%)
- P&C combined ratio: 92.6% (-0.4 pp.)
- Regulatory Solvency Ratio: 224% (+8 pp.)
- Shareholder's equity: 28.3% (+4.7 pp.)
- Operating result: EUR 5,192 million (+6.9%), of which:
- Life: EUR 3,129 million (+2.0%), of which:
- Life Italy: EUR 1,345 million (+4.8%)
- Life France: EUR 610 million (+4.3%)
- Life Germany: EUR 406 million (-4.2%)
- Life ACEER*: EUR 315 million (+2.9%)
- Life International: EUR 420 million (-15.2%)
- P&C: EUR 2,057 million (+3.3%), of which:
- P&C Italy: EUR 495 million (-15.1%)
- P&C France: EUR 205 million (+69.4%)
- P&C Germany: EUR 462 million (+3.8%)
- P&C ACEER*: EUR 551 million (+14.3%)
- P&C International: EUR 283 million (+6.3%)
- Asset Management: EUR 425 million (+26.9%), of which:
- Life: EUR 3,129 million (+2.0%), of which:
- Net result: EUR 2,670 million (+15.7%)
*ACEER - Austria, CEE, Russia
Gross written premiums for the Group amounted to EUR 69,785 million, an increase of 4.3% as a result of the positive development of both business segments. In line with the objectives of the 'Generali 2021' strategy, social and environmental products counted for EUR 15,225 million of total premiums.
The Group's shareholders' equity amounted to EUR 28,360 million (+20.2%). The change is mainly due to the result pertaining to the Group, the distribution of the dividend and the change in other profits or losses recognised to shareholders' equity (change in AFS reserves).
The Group confirms an excellent capital position, with the regulatory solvency ratio at 224%, an increase of 8 p.p. despite the persistently low interest rates.
Regarding the financial optimisation objective of the Group's strategic plan, in January 2020 the Group has already reached the mid-point of its debt reduction target range, with a reduction in annual interest spending exceeding the top target set out in the plan.
The RoE stood at 12.4%, in line with the target of the 'Generali 2021' strategy.
Life net inflows grew to EUR 13,632 million, remaining among the highest levels in the sector. The growth rate at 19.6% year-on-year was driven primarily by Italy (+27.3%), France (+33.5%) and Asia (+28.9%) that benefits, in particular, from fewer lapses on savings products. Life technical reserves increased by 7.6% to EUR 369.4 billion.
Gross written premiums amounted to EUR 48,260 million (+4.5%) thanks to a particularly strong fourth quarter. Protection product premiums increased by 7.6%, supported by the growth in all the countries in which the Group operates. Savings also witnessed an increase (+5.5%), reflecting the trends seen in Italy (+6.1%), France (+11.7%) and Germany (+11.6%). Premiums from unit-linked products fell by 2.8% for the full year; however, the final quarter of the year posted a recovery, with positive performances extended across the Group's key areas of operations.
New business in terms of present value of new business premiums (PVNBP) amounted to EUR 45,664 million, an increase of 10.1%. Savings products grew (+15.2%) in the Group's key areas of operations (in particular, thanks to the new savings products without annual guarantee sold in Italy), more than offsetting decreases witnessed in Spain and China. Protection products performed well (+17.3%), especially in Germany and France. The unit-linked business fell (-3.7%), due to the unfavourable performance of production witnessed in Italy that was partially offset by the solid performance in Germany and France.
The new business margin remained at excellent levels of 3.89% (-0.49 pp.). The slight decrease can be attributed to the unfavourable economic context but is mitigated by the further reduction in financial guarantees and improved productive mix.
As a consequence of the actions described above, the new business value (NBV) decreased by 2.2% and stood at EUR 1,777 million.
The operating result of the Life segment stood at EUR 3,129 million (+2.0). The increase reflects the positive development in the technical margin and the investment results.
Premiums in the P&C segment confirm the growth posted during the year, reaching EUR 21,526 million, up by 3.9% thanks to the positive performance both in the motor and non-motor lines of business.
The increase in the motor segment (+2.4%) was supported by the significant growth in ACEER (+6.1%), reflecting positive trends in the Czech Republic, Hungary and in Austria. France also increased (+4.1%), partly as a result of new distribution partnerships as well as Americas and Southern Europe (+13.5%), mainly due to the pricing adjustments made in Argentina to account for inflation. Motor premium income in Italy fell by 1.3%, as a result of the reduction of motor third-party liability portfolio.
Non-motor premiums also rose (+3.8%), thanks to the positive trends in the Group's areas of operations. In detail, premiums also in ACEER (+6.1%), France (+3.2%), Italy (+2.9%), Germany (+1.7%), and International (+5.8%), driven by Spain (+4.6%).
The combined ratio was 92.6% (-0.4 p.p.). The ability in risk selection was confirmed by the decrease in the non-catastrophe current year loss ratio also impacted by approximately EUR 70 million lower of large man-made claims. The impact from natural catastrophe claims was 2% (FY2018: 1.7%).
The operating result stood at EUR 2,057 million (+3.3%), increase sustained by the improvement of the technical result.
Asset Management segment
The operating result of the Asset Management segment stood at EUR 425 million, up by 27%. The increase came primarily from the growth in operating revenues at EUR 813 million (+34%), driven by the market performance and the consolidation of the revenues of the new multi-boutiques.
Third-party assets under management rose from EUR 27 billion at the end of 2018 to EUR 106 billion at the end of 2019 primarily due to the integration of the new boutiques and the contribution of assets of a number of companies disposed of during the year. These assets were previously held by the Group and retained under its management as a result of the sale agreements.
Total assets under management reached EUR 531 billion.
The net profit of the Asset Management segment increased to EUR 280 million (+19%).
Philippe Donnet, Generali Group CEO, commented:
"Generali closed 2019 with the best operating result in its history and with an excellent capital position, consolidating its role as a global leader in the industry. This set of results confirms that we are fully on track to meet all the targets of the 'Generali 2021' strategic plan. (...) These results, obtained despite the macroeconomic context, were achieved thanks to the contribution from all of Generali's people - employees, agents and partners - who work to help us achieve our ambition of being a Life-time Partner to our customers. Our priority is to foster the Group's growth that incorporates our long-term commitment to Sustainability. We have set clear and measurable objectives focussing on the environment - with regard to direct environmental impact, products and investments - employee well-being, the local communities in which we operate as well as the highest standards of governance."
More financial information about Generali can be found at generali.com/investors/reports-and-presentations.