Generali Operating Profit Rises Despite Natural-Disaster Costs — Update

By Elena Vardon

Assicurazioni Generali posted a slight rise in operating profit for the first half, when better results in its life-insurance and asset-management segments offset higher natural-disaster costs at its property and casualty business.

The Italian insurer on Friday said its operating profit--a metric closely watched by analysts and investors--came in at 3.72 billion euros ($4.06 billion) for the six months ended June 30, 1.6% higher than the same period the previous year and roughly in line with expectations of EUR3.74 billion, taken from a company-compiled consensus.

The hit from natural catastrophes, lower discounting benefits and higher insurance finance costs hurt its property and casualty performance, with operating profit for the segment falling 6.7% to EUR1.73 billion. This led its combined ratio, a measure of underwriting performance that indicates a profit if the level is below 100, to rise eight percentage points to 92.4%.

Generali's life-insurance business posted EUR5.1 billion in net inflows from protection and unit-linked policies--compared with outflows a year prior--and posted a 7.8% rise in operating profit to EUR1.96 billion for the period. Its asset and wealth-management division also helped nudge up the overall result, with operating profit rising 19% to EUR566 million.

Assets under management stood at EUR820.79 billion at the end of the period, 25% ahead of a year prior on the consolidation of its acquisition of U.S. firm Conning, Generali said.

Its solvency ratio--a measure of capital strength--stood at 211%, nine percentage points lower than a year prior on its Liberty Seguros acquisition and its EUR500 million share buyback program, which it announced in January and launched on Friday.

The company is on track to reach all of the targets it set out in the three-year growth plan it launched in December 2021, Chief Executive Philippe Donnet said. These aims included 6%-8% annual growth in earnings per share between 2021 and 2024 and up to EUR5.6 billion in cumulative dividends.

The group--which makes most of its profit from Italy, France, Germany and Central and Eastern Europe--is set to lay out its next three-year strategy at an investor day in late January.

Shares in Milan slid by around 2% to EUR22 at market open.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

August 09, 2024 04:28 ET (08:28 GMT)

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