Assicurazioni Generali S.p.a. · MIL:G
Assicurazioni Generali — H1 2016 Earnings Presentation
48 slides from Assicurazioni Generali's earnings presentation, Jul 29, 2016
Slide 1: GENERALI GROUP 2016 First Half Results
GENERALI GROUP 2016 First Half Results The like for like change of written premiums, life net inflows, APE and NBV is on equivalent terms (on equivalent exchange rates and consolidation area).
Slide 2: Agenda
2 Agenda I. Business Overview Page 4 Philippe Donnet – Group CEO II. 2015 Group Financials Page 11 Alberto Minali – General Manager & Group CFO III. Backup Page 31 © Generali July 29, 2016 2016 First Half Results Public
Slide 3: Agenda: Business Overview
3 Agenda I. Business Overview Philippe Donnet – Group CEO page 4 © Generali July 29, 2016 2016 First Half Results Public
Slide 4: The Group restored a solid foundation in recent years, with great success
4 The Group restored a solid foundation in recent years, with great success Governance Group Management Committee established “One group” modus operandi Focused on core insurance business Capital Resilient and strong capital position rebuilt Profitability Significant improvement in O
Slide 5: In the current environment, we need to move faster
5 In the current environment, we need to move faster 1 2 Improve operating Long term value performance creation © Generali July 29, 2016 2016 First Half Results Public
Slide 6: Improve operating performance
6 Improve operating performance Turnaround the Simplify, rationalize, digitalize, automate processes operating Committed to invest in modernisation and transformation machine More aggressive on cost savings Focus resources where we can have: Improve our - Relevant size footprint - Good profi
Slide 7: Long term value creation
7 Long term value creation Rebalance Diversification of our profit sources, through exploitation portfolio of profitable opportunities in P&C, Health, Unit Linked, structure Protection; Increase fee based revenues Innovation and Distinctive and innovative products customer/ Responsive to custo
Slide 8: Execution will differentiate us faster
8 We have the right team to deliver: Simpler, Smarter and Faster Obsessive attention to efficiency Execution will Higher vigilance on performance differentiate us Increased effectiveness of reporting lines We must execute faster Empowered CEOs © Generali July 29, 2016 2016 First Half Results
Slide 9: Final remarks
9 Final remarks Our strategy will be accelerated: execution will make the difference Full update and delivery proof points at upcoming Investor Day Our results and technical performance are solid: on track to deliver our promises © Generali July 29, 2016 2016 First Half Results Public
Slide 10: Agenda: 2016 First Half Group Financials
10 Agenda II. 2016 First Half Group Financials Alberto Minali – General Manager & Group CFO Profit & Loss and Balance Sheet page 11 Business review page 18 © Generali July 29, 2016 2016 First Half Results Public
Slide 11: Key First Half 2016 financials at a glance
Profit & Loss 11 Key First Half 2016 financials at a glance Operating Result: Lower by 10.5%, mainly due to the decision to realise a lower level gains in current market conditions, compared to the relatively high level of last year. Strong technical performance in both Life and P&C Net Result:
Slide 12: Operating result by segment
Profit & Loss 12 Operating result by segment (Euro m) -10.5% 2,779 3 2,487 (60) (62) (173) 1H15 Life P&C Holding and other Cons. Adj 1H16 businesses 1H 16 1,653 1,042 (102) (106) 2,487 1H 15 1,713 1,103 71 (109) 2,779 D -3.5% -5.6% n.m. -2.4% -10.5% © Generali July 29, 2016 2016 First Half Results P
Slide 13: From operating result to net profit
Profit & Loss 13 From operating result to net profit (Euro m) Including: -€ 91 m: restructuring costs -€ 62 m: VOBA amortization 2,487 (45) (405) (171) 1,178 Including: (606) (0) -€ 367 m: Interest costs (82) Operating Non Oper. Non Oper. Net Other Taxes Disc. Minorities Net Result Investment Holdin
Slide 14: Shareholders' equity
Balance Sheet 14 Shareholders’ equity Shareholders’ equity rollforward Shareholders’ equity sensitivities (Euro bn) +4.2% (Euro bn) 1,417 1,178 24,562 23,565 (1,123) (475) Equities -20% -1.0 Interest rate +50bps -2.2 Shareholders' Δ in AFS HY 2016 Net Dividend Other Shareholders' Equity FY15 Reserve
Slide 15: Solvency II: Internal Model View & Regulatory view
Solvency 2 15 Solvency II: Internal Model View & Regulatory view Eligible own funds vs. Required capital Eligible own funds vs. Required capital (Internal model view, Euro bn) (Regulatory view, Euro bn) 202% 188% 171%1 161%2 41.3 40.7 39.6 38.3 23.8 23.8 20.5 21.1 FY15 1H16 FY15 1H16 Eligible own fu
Slide 16: Solvency II: Internal Model View
Solvency 2 16 Solvency II: Internal Model View Resilient development in a volatile market, with strong organic capital generation Excess Own Solvency II Funds1 ratio (Euro bn) (%) FY 2015 20.9 202% Perimeter & FX 0.0 +0%pts. Normalised capital 1.5 +8%pts. generation Variances and other -22%pts. (3.9
Slide 17: Agenda: Business review
17 Agenda II. 2016 First Half Group Financials Alberto Minali – General Manager & Group CFO Profit & Loss and Balance Sheet page 11 Business review page 18 © Generali July 29, 2016 2016 First Half Results Public
Slide 18: Life key financial indicators
Life Insurance 18 Life key financial indicators (Euro m) 1H15 1H16 LFL D 2Q15 2Q16 LFL D Gross written premiums 26,906 25,816 -3.5% 13,240 12,385 -5.8% Net inflows 8,200 7,523 -7.3% 3,894 2,977 -22.5% Life operating result 1,713 1,653 -3.5% 890 897 +0.8% Life operating ratio on investments (bps) 43
Slide 19: Life Operating result by driver
Life Insurance 19 Life Operating result by driver (Euro m) 111 -226 -3.5% 1,713 54 1,653 Decreasing investment result due to lower net realized gains, down from the exceptionally high levels of 1H15 Partially offset by improving technical margin and expense result 1H15 Technical Margin Investmen
Slide 20: Life inflows and technical reserves
Life Insurance 20 Life inflows and technical reserves1 +2.0% (Euro m) 369.5 7.5 3.7 377.0 74.6 (3.0) (0.8) 73.7 -1.2% 1H15 1H16 Italy 3,919 3,948 294.9 303.3 France 721 332 +2.8% Germany 2,031 1,468 FY15 Net Loadings, Policyh. Share Exchange 1H16 CEE 240 265 Inflows Risk & of Invest. Result Rate & O
Slide 21: Life new business analysis
Life Insurance 21 Life new business analysis APE decline (-4.5%), mainly due to the uncertain market situation, leading to a decrease of unit linked business (-23.2%) and a slight increase of saving business (+0.6%). Protection business reverses the trend of the first quarter registering an increa
Slide 22: Life investment breakdown and performance
Life Insurance 22 Life investment breakdown and performance Life segment general account (%) Current returns Euro 332 bn Euro 352 bn Euro m % 1.2 1.6 2.6 2.5 1H15 4,867 1.7 2.7 2.7 4.2 3.7 Fixed income 8.1 6.9 Other 1H16 4,805 1.6 Cash & cash equivalent 1H15 220 1.6 Equity 36.1 36.2 1H16 385 2.9 Rea
Slide 23: P&C key financial Indicators
P&C Insurance 23 P&C key financial Indicators (Euro m) 1H15 1H16 LFL D 2Q15 2Q16 LFL D Gross written premiums, of which: 11,266 11,131 +1.3% 4,783 4,820 +3.9% Primary Motor 4,498 4,363 +2.3% 1,827 1,832 +6.9% Primary Non Motor 6,391 6,359 +0.1% 2,767 2,762 +0.8% Combined ratio (%) 92.6% 92.3% -0.3%p
Slide 24: P&C Operating result by driver
P&C Insurance 24 P&C Operating result by driver (Euro m) -5.6% 36 (41) 1,103 (57) 1,042 Positive technical performance with a further improving combined ratio to 92.3% (-0.3%pts) Decreasing investment result due to lower interest rate environment Other component development mainly due to some
Slide 25: P&C gross written premiums trends
P&C Insurance 25 P&C gross written premiums trends (Euro m) 1H15 1H16 LFL Italy 2,927 2,815 -3.8% Overall premiums growth (+1.3%), mainly due to Motor (+2.3%): France 1,380 1,368 -0.9% Italy declines -3.8% both in Motor (-6.1%, due to the exit of some large fleet contracts) and Non Motor (-2.3%
Slide 26: Combined ratio analysis
P&C Insurance 26 Combined ratio analysis Combined ratio (%) Expense ratio (%) +0.1%pts. -0.3%pts. 27.6 0.3 27.7 6.0 (0.3) 5.8 92.6 0.1 92.3 (0.4) 21.6 21.9 27.6 27.7 Administr. costs Acquisition costs 1H15 Δ Admin Δ Acq. 1H16 Loss ratio (%) -0.4%pts. 65.0 64.7 65.0 0.3 64.7 (0.5) (0.1) 1H15 Δ Expens
Slide 27: Combined ratio by country
P&C Insurance 27 Combined ratio by country (%) 1H15 1H16 LFL Italy 88.7% 88.6% -0.1%pts. Combined ratio stable in Italy, mainly thanks to the France 99.2% 100.1% +0.9%pts. substantially absence of Nat Cat impact (in 1H15 the impact was 2.6%pts.) Germany 92.5% 91.4% -1.1%pts. Combined ratio in
Slide 28: P&C investment breakdown and performance
P&C Insurance 28 P&C investment breakdown and performance P&C segment general account (%) Current returns Euro 40 bn Euro 39 bn Euro m % 3.8 3.7 1H15 417 1.6 Other 11.6 10.6 Fixed income 1H16 399 1.5 10.9 9.7 Cash & cash equivalent 5.3 1H15 76 2.2 6.3 Equity 6.7 Real estate 7.3 1H16 67 2.9 Equity 1H
Slide 29: Focus on Holding & Other businesses segment
Holding & Other businesses 29 Focus on Holding & Other businesses segment (Euro m) 1H15 1H16 2Q15 2Q16 Financial 245 173 -29.6% 96 84 -12.9% of which Banca Generali1 172 84 -51.2% 57 44 -21.9% Operating holding expenses (251) (238) -5.2% (135) (126) -6.5% Other businesses2 77 (37) n.m. 56 (22) n
Slide 30: Final remarks
GM & CFO – Final remarks 30 Final remarks Very strong technical results in both Life and P&C, showing the benefits of our strategy Solvency position proves resilient, at 188% despite the market turmoil On track to deliver our promises, despite the worsened environment © Generali July 29, 2016
Slide 31: Agenda: Backup
31 Agenda III. Backup • Cost page 32 Investments page 34 Financial debt page 40 Solvency 2 page 43 © Generali July 29, 2016 2016 First Half Results Public
Slide 32: 1H16 Cost development
Back up: Focus on costs 32 1H16 Cost development Group operating expense development Reconciliation of general expenses from (OpEx view) IFRS view to OpEx view (Euro bn) (1H16, Euro bn) 3.2 3.1 (3.1) Holding & other Life P&C 0.4 2.4 3.1 0.5 0.1 2.7 Acq. & Admin. Commissions Claims Other items & Tota
Slide 33: Agenda: Investments
33 Agenda III. Backup Cost page 32 • Investments page 34 Financial debt page 40 Solvency 2 page 43 © Generali July 29, 2016 2016 First Half Results Public
Slide 34: Assets under management
Backup: Investments 34 Assets under management Total Portfolio: Euro 528 bn Breakdown by region and asset class (%) (%) 4 Italy 10 3 31 France Germany By Region CEE 29 EMEA 10% General 23 RoW and other operations account Unit Linked 14% 3 4 76% 3 Third party 1 Equity investments Fixed income Real es
Slide 35: Fixed Income Portfolio
Backup: Investments 35 Fixed Income Portfolio Total Portfolio Covered Corporate Government Euro 350 bn Euro 28 bn Euro 112 bn Euro 180 bn1 (%) (%) (%) (%) 8.6 0 60 11 1 3 6 2 12 Other fixed Income 8.0 9 0 Covered 18.9 17 35 49 32 67 43 Corporate non fin. 13.1 5 AAA AA A BBB Not Investment Grade Not
Slide 36: Fixed Income Portfolio by country
Backup: Investments 36 Fixed Income Portfolio by country Total Portfolio Covered Corporate Government Euro 350 bn Euro 28 bn Euro 112 bn Euro 180 bn (%) (%) (%) (%) 8.6 7 14 Other fixed 15 29 Income 8.0 43 41 12 39 Covered 18.9 3 0 19 34 7 13.1 1 2 3 Corporate non fin. 13 18 Italy Germany France CEE
Slide 37: Equity & Equity-like
Backup: Investments 37 Equity & Equity-like Alternative funds: Euro 5 bn Total Portfolio: Euro 17 bn Equity: Euro 9 bn (%) (%) (%) Life, P&C and H&O Life, P&C and 4 Financial 14 35 58 Life Life 30 P&C 7 P&C H&O 82 H&O 53 Equity funds: Euro 3 bn (%) Life, P&C and H&O 17 Listed and 15 Unlisted 0 30 Eq
Slide 38: Asset Allocation: Real Estate
Backup: Investments 38 Asset Allocation: Real Estate Total Portfolio: Euro 24 bn1 Breakdown 3 4 Office by use(2) 12 (%) Residential Breakdown by utilization(2) 15 Retail (%) 16 66 Logistic Investment properties Other/Mixed Own use Breakdown 2 by country2 Italy 84 20 (%) 33 Germany 3 France CEE RoE 2
Slide 39: Agenda: Financial debt
39 Agenda III. Backup Cost page 32 Investments page 34 • Financial debt page 40 Solvency 2 page 43 © Generali July 29, 2016 2016 First Half Results Public
Slide 40: Focus on financial debt
Backup: Financial debt 40 Focus on financial debt Average cost & maturity of financial debt Total financial debt (%) (Euro bn) Euro 13,117 m 1 Euro 12,662 m 2 482 534 FY15 1H16 Average cost (%) 5.65% 5.69% 9,643 9,148 Subordinated/Hybrid 6.13% 6.15% Senior 4.17% 4.18% Average maturity (years) 6.68 7
Slide 41: Financial debt breakdown by expiry date/call date
Backup: Financial debt 41 Financial debt breakdown by expiry date/call date (Euro m) New Tier 2 Hybrid Bond issuance with call date in launched in February 2017, 2,569 May to already refinance the refinanced 2017 call date 1,750 1,500 1,421 1,270 1,250 887 850 750 250 2017 2018 2019 2020 2022 2024 2
Slide 42: Agenda: Solvency 2
42 Agenda III. Backup Cost page 32 Investments page 34 Financial debt page 40 • Solvency 2 page 43 © Generali July 29, 2016 2016 First Half Results Public
Slide 43: Reconciliation of IFRS equity to Solvency II Eligible Own Funds
Back up: Solvency 2 43 Reconciliation of IFRS equity to Solvency II Eligible Own Funds Solvency II Eligible own funds (1H16, Euro bn) 9.3 Of which: Of which: (6.6) bn Goodwill 5.0 bn Bonds (3.9) bn Intangibles & DAC 5.9 bn Real Estate 9.8 39.6 10.9 (10.5) (3.8) (1.8) 25.6 Of which: 11.5 bn net techn
Slide 44: Disclaimer
44 Disclaimer 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 r
Slide 45: Next Events
45 Next Events 10 November 2016 23 November 2016 9M 2016 results Investor Day reporting 2016 © Generali July 29, 2016 2016 First Half Results Public
Slide 46: Investor Relations contacts
46 Team Spencer Horgan Head of Investor & Rating Agency Relations Spencer.Horgan@Generali.com +44 20 7265 6480 Stefano Burrino Rodolfo Svara Investor Relations Investor Relations Assicurazioni Generali Stefano.Burrino@Generali.com Rodolfo.Svara@Generali.com P.za Duca degli Abruzzi 2 +39 040 671202 +
Slide 47: Thank you
A. GENERALI Thank you
Slide 48: GENERALI GROUP 2016 First Half Results
GENERALI GROUP 2016 First Half Results
Assicurazioni Generali — H1 2016 Earnings Presentation on 6ix