Assicurazioni Generali S.p.a. · MIL:G
Assicurazioni Generali — FY2021 Earnings Presentation
63 slides from Assicurazioni Generali's earnings presentation, March 2022
Slide 1: Generali Group 2021 Results
Generali Group 2021 Results The like for like change of written premiums and life net cash inflows is on equivalent terms (on equivalent exchange rates and consolidation area). Operating result, Asset Under Management and Life technical provisions exclude assets under disposals or disposed during th
Slide 2: Agenda
Agenda Strategy Overview p. 3 Group Financials p. 11 Backup p. 43 2
Slide 3: Strategy Overview
Strategy Overview PHILIPPE DONNET Group Chief Executive Officer
Slide 4: Key Messages
Key Messages Record operating and adjusted net results thanks to strong growth across all business lines Dividend per share at €1.07 and excellent capital position with Solvency II Ratio at 227% Successfully delivered “Generali 2021” in an unprecedented global scenario Strong performance for all sta
Slide 5: 2021: Strong growth across all key performance indicators
2021: Strong growth across all key performance indicators OPERATING RESULT ADJUSTED NET RESULT ¹ SOLVENCY II (€ m) +12.4% (€ m) +45.1% (%) +3 p.p. 5,852 2,795 227 5,208 224 1,926 2020 2021 2020 2021 2020 2021 COMBINED RATIO NEW BUSINESS MARGIN DIVIDEND PER SHARE (%) (%) (€) 1.47 +1.7 p.p. +0.57 p.p.
Slide 6: Generali 2021: Targets delivery in an unprecedented global scenario
Generali 2021: Targets delivery in an unprecedented global scenario FINANCIAL TARGETS END OF PLAN STATUS 6% – 8% EPS CAGR RANGE¹ 2018 - 2021 7.6% ✓ ACHIEVED €4.5 – 5.0 billion CUMULATIVE DIVIDENDS 2019 - 2021 €4.52 bn ✓ ACHIEVED 55% – 65% DIVIDEND PAY-OUT RANGE² 12.4% 2019 ACHIEVED >11.5% 7.7% 2020
Slide 7: Generali 2021: Industrial KPIs achieved in all strategic areas
Generali 2021: Industrial KPIs achieved in all strategic areas STRATEGIC ITEM MAIN INDUSTRIAL KPIs GOAL END OF PLAN ▪ Earnings CAGR 2018-2021 insurance markets Europe 3% - 6% Over- achieved PROFITABLE GROWTH ▪ Earnings CAGR 2018-2021 service-based revenue streams 7% - 10% Impact of COVID-19 ▪ Earnin
Slide 8: 2021 Group Sustainability Highlights
2021 Group Sustainability Highlights¹ 12% Voted New Green and Sustainable Against 1,710 Carbon intensity of Investments Investments Net-Zero Asset -29.6% Meetings voted 128 tCO2/€ m Organizional entities in 2021 Owner Alliance vs 2019 €2,537 m with a smart working member policy in place supporting S
Slide 9: M&A as an accelerator of growth and diversification
M&A as an accelerator of growth and diversification CATTOLICA ▪ Successfully completed voluntary public tender offer on all ordinary shares ▪ Achieved #1 position in P&C in Italy ▪ Strengthen leadership in France in Health & Protection and overall P&C EUROPE LA MÉDICALE¹ business, rebalancing portfo
Slide 10: Lifetime Partner 24: Driving Growth
Lifetime Partner 24: Driving Growth STRONG EARNINGS 6 - 8% PER SHARE EPS CAGR RANGE1 GROWTH 2021-2024 INCREASED > €8.5 billion ENHANCE EARNINGS CASH CUMULATIVE NET PROFILE GENERATION HOLDING CASH FLOW2 2022-2024 €5.2 - 5.6 billion HIGHER CUMULATIVE DIVIDEND2 LEAD INNOVATION DIVIDEND3 2022-2024, WITH
Slide 11: Group Financials
Group Financials CRISTIANO BOREAN Group Chief Financial Officer
Slide 12: 2021 Results at a glance
2021 Results at a glance 216216 FY20 FY21 Δ LFL¹ VOLUMES Gross written premiums (€ m) 70,704 75,825 +6.4% Life (€ m) 48,557 51,680 +6.0% P&C (€ m) 22,147 24,145 +7.0% Life net inflows (€ m) 12,114 12,729 +4.4% Life reserves (€ bn) 384.7 424.5 +10.3% PROFITABILITY Operating result (€ m) 5,208 5,852 +
Slide 13: Exposure to Russia & Ukraine
Exposure to Russia & Ukraine ▪ The General Account investment exposure at December 31st was equal to €683 m and coming from: ➢ 38.5% stake in the insurance unlisted company Ingosstrakh, at fair value of €384 m and amortized cost of €231 m as at FY2021. It is accounted in the AFS portfolio and is inc
Slide 14: Operating result growth driven by all business lines
Operating result growth driven by all business lines (€ m) +12.4% 431 125 5,852 189 194 5,208 (295) FY20 Life P&C AM Holding & Other Cons. Adj FY21 businesses FY21 2,816 2,650 672 561 (847) 5,852 FY20 2,627 2,456 546 130 (551) 5,208 Δ% +7.2% +7.9% +22.9% n.m. +53.6% +12.4% 14
Slide 15: Successful steering of life growth
Successful steering of life growth (€ m) FY20 FY21 Δ LFL VOLUMES Gross written premiums 48,557 51,680 +6.0% Net inflows 12,114 12,729 +4.4% PVNBP 47,091 51,192 +8.6% PROFITABILITY Life operating result 2,627 2,816 +7.2% Life operating ratio on investments (bps) 63 63 0 p.p. New Business Value 1,856
Slide 16: Growth in technical result driving life operating result
Growth in technical result driving life operating result (€ m) 96 +7.2% 595 2,816 2,627 ▪ Growth in technical margins reflecting more (502) favorable business mix towards unit-linked and protection products ▪ Investment result improving from last year, which was impacted higher impairments and accel
Slide 17: Accelerated growth in preferred lines of business
Accelerated growth in preferred lines of business NET INFLOWS BY COUNTRY NET INFLOWS MIX BY LOB (FY21) NET INFLOWS DEVELOPMENT BY LOB (FY21- FY20) (€ m) (€ m) (€ m) FY20 FY21 Δ%LFL Italy 6,846 4,329 -36.8% Unit Linked +1,797 France -90 2,357 n.m. 8,885 Germany 3,446 3,528 +2.4% Unit-Linked ACEER 176
Slide 18: Strong and capital efficient growth in life reserves
Strong and capital efficient growth in life reserves TOTAL LIFE RESERVES CAPITAL LIGHT RESERVES ON TOTAL¹ (€ bn) +10.3% (%) 16.8 19.7 424.5 384.7 12.7 (2.7) 108.7 85.7 (6.8) +26.8% 67.7% 62.7% +5.6% 299.0 315.8 FY20 Net Loadings, Policyholder Cattolica Exchange rate, FY21 FY20 FY21 inflows risk & sh
Slide 19: Excellent new business value generation
Excellent new business value generation PVNBP (€ m) X MARGIN ON PVNBP (%) = NEW BUSINESS VALUE (€ m) 47,091 51,192 3.94% 4.52% 1,856 2,313 +8.6% +0.57 p.p. +24.2% 487 Saving 20,945 20,918 +0.0% 2.33% 2.32% -0.1% 487 989 +10.4% 12,647 +15.1% Protection 11,436 7.47% 7.82% 854 Unit-Linked +19.4% 17,599
Slide 20: Strong growth in volumes coupled with higher profitability
20 Strong growth in volumes coupled with higher profitability PVNBP MARGIN ON PVNBP NBV (€ m) (%) (€ m) +8.6% +24.2% -6.8% +0.67 p.p. +14.9% -0.17 p.p. +0.57 p.p. 51,192 +32.9% +14.6% +1.04 p.p. 2,313 19,334 8.16% +13.7% 1,065 6.79% 12,588 4,511 12,454 +10.6% +0.81 p.p. +0.16 p.p. +23.9% 5.51% +84.8
Slide 21: Resilient life investment return
Resilient life investment return Life segment general account (%) Current returns €358 bn €360 bn €m % 3.4 3.5 FY20 7,741 2.6% 2.9 1.8 2.7 3.0 Fixed income 3.9 4.6 FY21 7,585 2.5% 10.2 11.4 FY20 341 2.4% Other Equity 28.4 27.9 Cash & cash equivalent FY21 467 3.1% Real estate FY20 490 5.2% Equity (1)
Slide 22: Driving further sustainability in our life business
Driving further sustainability in our life business BREAKDOWN OF LIFE RESERVES BREAKDOWN OF LIFE NEW BUSINESS PREMIUMS 2020 2021 2020 2021 30% 34% 31% 42% 58% 70% 66% 69% Current return1 2.89% 2.85% Reinvestment return 1.31% 1.50% 163 bps 170 bps 143 bps 144 bps Average guarantee Average guarantee o
Slide 23: Strong growth in P&C volumes with excellent technical profitability
Strong growth in P&C volumes with excellent technical profitability (€ m) FY20 FY21 Δ LFL VOLUMES Gross written premiums, of which: 22,147 24,145 +7.0% Primary Motor 8,117 8,649 +4.9% Primary Non Motor 13,116 14,399 +7.5% PROFITABILITY Combined ratio (%) 89.1% 90.8% +1.7 p.p. Nat Cat impact (%) 1.5%
Slide 24: Record level P&C operating result
Record level P&C operating result (€ m) +7.9% 73 2,650 ▪ Worsening of the technical result due to 240 2,456 higher Nat Cat and the progessive reduction of COVID-19 restrictions (119) ▪ Investment result improving thanks to extraordinary dividend from Banca Generali, positive contribution of Cattolic
Slide 25: Strong volume growth at sound technical profitability
Strong volume growth at sound technical profitability Total variation due to: Primary Motor +4.9% GROSS WRITTEN PREMIUMS Primary Non-Motor +7.5% COMBINED RATIO (€ m) (%) +7.0% +5.1 p.p. -0.1 p.p. +1.7p.p. +7.3% +3.2 p.p. +0.8 p.p. +6.1% +8.2% +1.0 p.p. 97.9 +2.2% 24,145 +0.3 p.p. 94.7 +9.1% 5,991 91
Slide 26: Strong P&C technical profitability notwithstanding higher nat cat
Strong P&C technical profitability notwithstanding higher nat cat COMBINED RATIO EXPENSE RATIO +0.1 p.p. (%) (%) 28.1 0.3 28.2 +1.7 p.p. 5.1 (0.2) 4.9 89.1 0.1 0.1 1.6 90.8 23.0 23.3 Administr. costs Acquisition costs 28.1 28.2 FY20 Δ Admin Δ Acq. FY21 LOSS RATIO +1.6 p.p. (%) 61.0 0.9 0.7 62.6 61.0
Slide 27: Higher current return thanks to Banca Generali, Cattolica and private equity
Higher current return thanks to Banca Generali, Cattolica and private equity P&C segment general account (%) Current returns €40 bn €44 bn €m % 7.0 6.0 FY20 636 2.4% 9.8 Fixed income 10.9 FY21 606 2.2% 9.4 10.5 FY20 59 2.8% 4.1 4.7 Other Equity 8.5 7.8 Cash & cash equivalent FY21 63 3.4% Real estate
Slide 28: Asset Management: main KPIs
Asset Management: main KPIs KPIs End of Target FY20 FY21 plan 2021 status Net result Asset Management (€ m)1 386 504 >400 External Clients Revenues 30% 30%2 >35% (% of operating revenues) Operating Margin (%)3 55% 59% >45% 1. Before minorities 2. 3rd-party revenues €335 m and total revenues €1,135 m
Slide 29: Asset Management: growth supported by positive market trends
Asset Management: growth supported by positive market trends Key Financials1 (€ m) FY20 FY21 Δ% Operating Revenues 993 1,136 +14.3% o/w management and other fees 872 1,079 +23.7% o/w performance fees 122 57 -53.4% Operating Expenses (447) (464) +3.8% Operating Result 546 672 +22.9% Net result2 386 5
Slide 30: Solid growth in external client AUM
Solid growth in external client AUM Breakdown of revenues by Breakdown of external client assets Asset Manager expertise Total revenues (FY21): €1,135.5 m (€ bn) LDI / Insurance AUM (as of December 2020) 104.0 Active Net inflows Jan – Dec 21 +8.5 management 36.2% 38.4% Market effect Jan – Dec 21 & O
Slide 31: Strong contribution from Banca Generali and private equity
Strong contribution from Banca Generali and private equity (€ m) FY20 FY21 % Banca Generali1 353 405 +14.6% Other businesses2 305 672 n.m. Operating holding expenses (528) (516) -2.4% Total 130 561 n.m. 1. Banca Generali’s operating contribution as per Generali’s view 2. Including other financial b
Slide 32: Pro-forma of new Asset & Wealth Management segment reporting
Pro-forma of new Asset & Wealth Management segment reporting (€ m) New Banca 2021 Pro-forma 2021 Generali since 1Q allocation 2022 Life 2,816 - 2,816 P&C 2,650 - 2,650 Asset & Wealth Management 672 405 1,076 Holding & Other businesses 561 (405) 157 Banca Generali 405 (405) 0 Other businesses 672 - 6
Slide 33: From operating to net result
From operating to net result Including: €368 m: Net realized gains (€251 m): Net impairments Including: (€ m) (€1 m): Fair Value through P&L (€387 m): Restructuring costs (€91 m): VOBA amortization (€353 m): Other net non operating items 5,852 115 (590) (832) 0 2,847 Including: (1,351) (348) (€478 m
Slide 34: Strong underlying cash remittance
Strong underlying cash remittance REMITTANCE FROM OPERATIONS REMITTANCE RATIO ON DISTRIBUTABLE BUs’ IFRS NET RESULT (€ m) (%) 4,017 Capital Management 75 actions mainly Italy and 323 3,162 ACEER 100 2020 2021 1,041 302 619 Remittance ratio ca.135% ca.105% Other 525 International 559 565 ACEER German
Slide 35: Net holding cash supporting dividend growth
Net holding cash supporting dividend growth ▪ NHCF cumulative amount over NET HOLDING CASH FLOW (€ m) 2020 2021 2019-21 at €8.4 bn, overachieved vs target >€7 bn Remittance from subsidiaries 4,017 3,162 ▪ Net Holding Cash Flow reduction driven entirely by 2020 one-off components: Result of reinsuran
Slide 36: Shareholders' equity impacted by rate moves on fixed income
Shareholders’ equity impacted by rate moves on fixed income Shareholders’ equity rollforward Shareholders’ equity sensitivities (€ m) (€ bn) -2.4% 2,847 30,029 669 29,308 (2,315) (1,922) Equities -1.1 -25% Interest rate -3.3 Shareholders' equity Δ in AFS FY 2021 net results Dividend Other Shareholde
Slide 37: Excellent Solvency II ratio with reduced sensitivities
Excellent Solvency II ratio with reduced sensitivities Eligible own funds vs. Required capital Key sensitivities (€ bn) S-II ratio FY21 224% 227% 227% 50.6 Equities +25% 231% (Δ +4 p.p.) 44.4 Equities -25% 221% (Δ -6 p.p.) Yield curve +50bps 236% (Δ +9 p.p.) 22.3 19.8 Yield curve -50bps 217% (Δ -10
Slide 38: Strong positive contribution from normalized capital generation
Strong positive contribution from normalized capital generation Excess Own Own Solvency II ratio Funds SCR Funds1 (%) (€ bn) (€ bn) (€ bn) FY 2020 44.4 19.8 24.6 224% Regulatory changes (0.3) 0.5 (0.8) -7%pts Normalized capital generation +20%pts 3.7 (0.1) 3.8 +10%pts Economic variances 3.1 0.5 2.6
Slide 39: 2021 capital generation totaling €3.8 bn
2021 capital generation totaling €3.8 bn Total normalized Own Funds SCR1 capital generation (€ bn) (€ bn) (€ bn) Life 1.0 1.7 (1.5) 1.6 2.8 P&C 1.3 0.0 1.3 Holdings & Financial (0.3) 0.0 (0.3) Total Normalized Capital Generation 3.7 0.1 3.8 Life new business Other capital generation drivers 1. Posit
Slide 40: High quality capital mix: Tier 1 capital 86% of total
High quality capital mix: Tier 1 capital 86% of total Tiering of Solvency II capital Applicable Solvency II limits FY21 Solvency II FY21 limits Generali € bn % of total Tier 1 43.7 86% Restricted Tier 1 < 20% 4% of total Tier 1 of total Tier 1 Unrestricted Tier 1 41.8 83% Restricted < 50% 32% 1.9 4%
Slide 41: 2021 baseline for Generali 2024 strategy
2021 baseline for Generali 2024 strategy 2021 Adjusted1 €2,795 m Net Result (EPS) (€1.78) Cost to income 63.7% ratio: Insurance perimeter² 1. Adjusted for impact of gains and losses related to disposals and acquisitions 2. Total Group excluding A&WM and EA 41
Slide 42: Final remarks
Final remarks Strong and diversified earnings growth Continuous focus on high quality technical and fee earnings Improved financial flexibility reflecting strong capital generation and faster cash conversion 2021 results: solid foundation to “Lifetime Partner 24: Driving Growth” financial targets 42
Slide 43: Backup
Backup
Slide 44: Cattolica Group consolidation
Cattolica Group consolidation ▪ In the first 10 months of 2021, our minority stake was accounted with the equity method with a contribution to net income equal to €72 m, accounted in P&C ▪ In November 2021, Generali acquired the control of the Cattolica Group, with a stake of 84.475% of the Issuer's
Slide 45: Private Equity: pro-forma operating result by segment
Private Equity: pro-forma operating result by segment (€ m) 2020 2021 2020 Pro-forma1 Δ 2021 Pro-forma1 Δ Life 2,627 2,558 (69) 2,816 2,994 179 P&C 2,456 2,525 69 2,650 2,810 159 Asset Management 546 540 (6) 672 686 14 Holding & Other 130 (82) (212) 561 (85) (646) Consolidation adjustments (551) (33
Slide 46: Delivered €300 million total expense reduction in Insurance Europe
Delivered €300 million total expense reduction in Insurance Europe AMBITION TOTAL EXPENSE REDUCTION Insurance Europe2 (€ bn) €300 million total expense reduction (including Cost to Achieve1) in Insurance Europe by 6.4 restructuring/simplification of local operations 6.3 €303 m €303 m ✓ 6.2 6.1 Inclu
Slide 47: Cost to income ratio: FY2021 actual and target 2024
Cost to income ratio: FY2021 actual and target 2024 General expenses perimeter enlarged from Insurance Europe COST TO INCOME RATIO Cost to full Insurance perimeter Insurance perimeter (Total Group excluding A&WM and EA), (%) €6.6 bn 63.7 Earnings before taxes excluding 2.5 – 3.0 p.p. A&WM, Europ Ass
Slide 48: 2021 Group external client assets reconciliation
2021 Group external client assets reconciliation (€ bn) 15.4 179.1 50.8 112.9 AM External Client Wealth Pension Funds Group External Assets Management¹ & Others² Clients Assets 1. Wealth Management corresponds to Banca Generali. €50.8 bn include managed and banking products AUM 2. Pension Funds & Ot
Slide 49: Assets under management
Assets under management Total portfolio: €709.7 bn Breakdown by region and asset class (%) (%) 15 Italy 32 France 9 Germany 4 By Region CEE International 19 21 Other General account 25.2 Unit Linked 59.7 Third party investments 3 7 5 1 Equity 15.1 Fixed income Real estate By Asset Class Cash & Cash
Slide 50: Fixed Income Portfolio
Fixed Income Portfolio Total portfolio: €356.5 bn Covered bond: €12.1 bn Corporate bond: €101.8 bn Government bond: €194.3 bn¹ (%) (%) (%) (%) 1 13.5 3 8 21 4 1 5 3.4 27 40 32 40 20.3 57 Other fixed Income 8.3 58 Covered 22 Corporate non fin. Corporate fin. AAA AA A BBB Not Investment Grade Not Rate
Slide 51: Fixed Income Portfolio by country
Fixed Income Portfolio by country Total portfolio: €356.5 bn Covered bond: €12.1 bn Corporate bond: €101.8 bn Government bond: €194.3 bn (%) (%) (%) (%) 4 8 13.5 18 32 30 38 3.4 43 49 20.3 10 Other fixed Income 1 0 17 9 18 2 19 2 Covered 8.3 Corporate non fin. Italy France Germany CEE USA Other Corp
Slide 52: Equity & Equity-like
Equity & Equity-like Alternative funds: €12.3 bn Total portfolio: €28.1 bn Equity: €10.4 bn (%) (%) (%) Life, P&C, AM and Life, P&C, AM and 4 Other 13 23 Other 2 Life P&C Life AM P&C 74 37 Other AM 84 44 Other Equity funds: €5.3 bn (%) Life, P&C, AM and 8 Other 19 Listed and Unlisted Equity Equity F
Slide 53: Asset Allocation: Real Estate
Asset Allocation: Real Estate¹ Total portfolio: €34.6 bn¹ Breakdown by use² 8 4 Office Breakdown by utilization² (%) 18 Residential (%) Retail 59 Logistic 13 12 Other/Mixed Investment properties Own use Breakdown by country² 1 Italy 20 (%) 31 France Germany 87 5 CEE 13 RoE RoW 30 1. Data, at fair va
Slide 54: Focus on financial debt
Focus on financial debt AVERAGE COST & MATURITY OF FINANCIAL DEBT TOTAL FINANCIAL DEBT (€) 10.7 bn¹ FY20 FY21 9.7 bn 163 m 273 m Average cost 4.94% 4.60% Subordinated/Hybrid 4.90% 4.50% 8,760 m 7,681 m Senior 5.13% 5.13% Average maturity (years) 5.8 5.1 1,738 m 1,737 m Interest expenses on 493 478 F
Slide 55: Debt issuances breakdown by expiry date/call date
Debt issuances breakdown by expiry date/call date¹ NOMINAL VALUE (€ m) 8 125 1,750 1,000 1,750 1,510 769 850 750 500 600 500 424 199 100 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Senior Hybrid Subordinated Green Bonds Sustainability Bond 1. FY21 figure includes Cattolica Group subordina
Slide 56: Financial leverage: peer comparison
Financial leverage: peer comparison¹ Financial debt Financial leverage = S2 Unrestricted Tier 1 + financial debt FY20 FY21 Generali 21.2% 19.6% Peer 1 26.4% 27.5% Peer 2 29.9% 29.1% Peer 3 36.2% 31.7% 1. Peers considered in the comparison: Allianz, Aviva and Axa 56
Slide 57: Focus on SCR
Focus on SCR Pre-diversification SCR by region (€ bn) (%) AG & Holdings 5% International FY21 SCR before 13% 35.3 diversification Italy 38% ACEER Diversification 8.8 9% France 19% Germany Taxes 5.5 16% Pre-diversification SCR by type of risk (%) Credit 23% FY21 SCR excluding other 21.0 Operational r
Slide 58: Disclaimer
Disclaimer Certain of the statements contained herein are statements of future Neither Assicurazioni Generali SpA nor any of its affiliates, expectations and other forward-looking statements. directors, officers employees or agents owe any duty of care towards any user of the information provided he
Slide 59: Disclaimer / 2022 financial calendar
Disclaimer 29 April 2022 19 May 2022 2 August 2022 10 November 2022 Annual 1Q 2022 1H 2022 9M 2022 General Results Results Results Meeting reporting reporting reporting 59
Slide 60: Contacts
Contacts Assicurazioni Generali Giulia Raffo Stefano Burrino Emanuele Marciante Group Head of Investor & Rating Investor Relations Credit & Rating Agency Relations Piazza Duca degli Abruzzi 2 Agency Relations 34132 Trieste, Italy giulia.raffo@generali.com stefano.burrino@generali.com emanuele.marcia
Slide 61: Glossary
Glossary Term Definition bps Basis points CAGR Compound annual growth rate Cost to income metric, with income defined as the sum of General Expenses, Operating Result and Non-Operating Result C/I ratio (excluding non operating investments result and interest on financial debt); insurance perimeter (
Slide 62: Glossary
Glossary Term Definition p.p. Percentage points P&C Property and Casualty lines of business P&L Profit and Loss statement, synonym of Income statement, in the financial statements context (Profit & Loss) R-NPS Management tool used to gauge the loyalty of a firm's customer relationships (Relationship
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Assicurazioni Generali — FY2021 Earnings Presentation on 6ix