Assicurazioni Generali S.p.a. · MIL:G
Assicurazioni Generali — H1 2019 Earnings Presentation
47 slides from Assicurazioni Generali's earnings presentation, Aug 1, 2019
Slide 1: GENERALI GROUP 2019 First Half Results
GENERALI GROUP 2019 First Half 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 dispose
Slide 2: Agenda
2 Agenda I. 2019 First Half Business Review Page 3 Frédéric de Courtois – Group GM II. 2019 First Half Group Financials Page 13 Cristiano Borean – Group CFO III. Backup Page 31 © Generali August 1, 2019 First Half Results 2019
Slide 3: Agenda: 2019 First Half Business Review
3 Agenda I. 2019 First Half Business Review Frédéric de Courtois – Group GM page 4 © Generali August 1, 2019 First Half Results 2019
Slide 4: Generali 2021: strategic pillars and financial targets
GM – Business Review 4 Generali 2021: strategic pillars and financial targets STRATEGY PILLARS FINANCIAL TARGETS PROFITABLE GROWTH ▪ Strengthen leadership in Europe 6%-8% ▪ Focus on high potential insurance markets GROWING EARNINGS EPS CAGR RANGE(1) ▪ Develop a global Asset Management PER SHARE 2018
Slide 5: Key messages
GM – Business Review 5 Key messages Good start to Generali 2021 Technical excellence reaffirmed Profitable growth on-track Solid capital position and strong capital generation © Generali August 1, 2019 First Half Results 2019
Slide 6: Continued excellent technical performance & profitability
GM – Business review 6 Continued excellent technical performance & profitability OPERATING RESULT P&C COMBINED RATIO (€ m) (%) +7.6% 2,724 -0.2 p.p. 2,532 92.0 91.8 1H 2018 1H 2019 1H 2018 1H 2019 NORMALISED NET RESULT LIFE NEW BUSINESS MARGIN (€ m) (%) +6.4% -0.2 p.p. 4.5 4.4 1,310 1,231 1H 2018 1H
Slide 7: Life net inflows growing, mix impacted by financial markets
GM – Business Review 7 Life net inflows growing, mix impacted by financial markets NET INFLOW BY COUNTRY NET INFLOW MIX (€ m) (% of total) 1H18(1) 1H19 % Italy 2,320 2,674 +15.2% Savings 11% France 994 1,449 +45.7% +24 p.p. 34% Germany 1,770 1,868 +5.5% 37% Protection ACEER 95 75 -36.6% 32% -5 p.p.
Slide 8: Good growth and solid life profitability
GM – Business Review 8 Good growth and solid life profitability PVNBP +5.4% MARGIN ON PVNBP (€ m) (%) +0.60 p.p. -0.91 p.p. -0.18 p.p. +0.06 p.p. -1.5% 21,436 7.26% 6.21% +0.33 p.p. 5.35% +25.6% +9.6% 9,449 +3.6% -0.71 p.p. 4.40% -0.9% 2,137 2.92% 1,094 4,705 4,052 2.16% Italy France Germany ACEER I
Slide 9: Strong growth in P&C volumes at even higher technical profitability
GM – Business Review 9 Strong growth in P&C volumes at even higher technical profitability Total variation due to: Primary Motor +3.1% GROSS WRITTEN PREMIUMS Primary Non-Motor +3.6% COMBINED RATIO (€ m) (%) +3.9% -2.2 p.p. -0.3 p.p. -0.2 p.p. +1.6 p.p. +4.3 p.p. -1.6 p.p. 96.7 -1.3 p.p. 11,407 95.5
Slide 10: Asset Management Global: KPIs on track
GM – Business Review 10 Asset Management Global: KPIs on track 1H18 1H19 Target 2021 KPIs Net result A.M. Global (€ m) 109 133 >400 External Clients Revenues 13% 30% >35% (% of operating revenues) Operating Margin (%)(1) 55% 52% >45% (1) Calculated as (1- cost income ratio) © Generali August 1, 2019
Slide 11: Asset Management Global: focus on revenues contribution and external clients AuM
GM – Business Review 11 Asset Management Global: focus on revenues contribution and external clients AuM Breakdown of revenues by Asset Management expertise Breakdown of External Clients Assets (€ bn) Total revenues (1H19): € 360 m AuM (as of December 2018) 27.2 LDI / Insurance Assets from M&A(¹) +
Slide 12: Generali to become a leading P&C player in Portugal
GM – Business Review 12 Generali to become a leading P&C player in Portugal ▪ Reached an agreement to buy 100% of Seguradoras Unidas, #2 player in the Scope Portuguese non-life market with a market share of 15.5% ▪ Agreement also for 100% of Advance Care, service platform leader in medical services
Slide 13: Agenda: 2019 First Half Group Financials
13 Agenda II. 2019 First Half Group Financials Cristiano Borean – Group CFO page 14 © Generali August 1, 2019 First Half Results 2019
Slide 14: 2019 First Half at a glance: delivering profitable growth
CFO – At a glance 14 2019 First Half at a glance: delivering profitable growth 216216 1H18 1H19 D (LFL(1)) VOLUMES Gross Written Premiums (€ m) 35,084 35,728 +1.8% Life (€ m) 24,083 24,321 +0.9% P&C (€ m) 11,001 11,407 +3.9% Life Net Inflows (€ m) 5,689 7,387 +29.5% Life Reserves (€ bn)(2) 343,408 3
Slide 15: Operating Result improved across all business lines
CFO – Profit & Loss 15 Operating Result improved across all business lines (€ m) +7.6% 77 9 2,724 62 16 28 2,532 1H18 Life P&C AM Holding & Other businesses Cons. Adj 1H19 1H 19 1,611 1,121 186 21 (214) 2,724 1H 18 1,549 1,105 159 (56) (224) 2,532 D +4.0% +1.4% +17.4% n.a. -4.2% +7.6% © Generali Aug
Slide 16: Growth in Life volumes and earnings
CFO – Life Insurance 16 Growth in Life volumes and earnings (€ m) 1H18 1H19 LFL D VOLUMES Gross written premiums 24,083 24,321 +0.9% Net inflows 5,689 7,387 +29.5% PVNBP 21,431 21,436 +5.4% PROFITABILITY Life operating result 1,549 1,611 +4.0% Life operating ratio on investments (bps) 42 42 0 p.p. N
Slide 17: Improved technical profitability and investment result
CFO – Life Insurance 17 Improved technical profitability and investment result (€ m) +4.0% 208 40 ▪ Growth in technical margins reflecting good 1,549 1,611 developments in Italy, France and Germany (186) ▪ Investment result improving thanks to lower impairments and higher realized gains ▪ Increase i
Slide 18: Life New Business: profitability remains solid
CFO – Life Insurance 18 Life New Business: profitability remains solid PVNBP (€ m) X MARGIN ON PVNBP (%) = NEW BUSINESS VALUE (€ m) 21,431 21,436 4.50% 4.40% 965 942 +5.4% -0.18 p.p. +1.3% 10,727 11,843 2.82% 2.79% Savings +12.1% 302 +12.4% 330 Protection 3,503 +17.7% 10.66% 10.70% 3,909 374 +17.1%
Slide 19: Reserves mix: shift to capital light continues
CFO – Life Insurance 19 Reserves mix: shift to capital light continues (€ bn) TOTAL LIFE RESERVES CAPITAL LIGHT RESERVES ON TOTAL(1) € bn) (%) +4.3% 343.4 7.4 9.7 358.2 66.1 (3.0) (0.7) 73.0 +10.5% 58.8% 57.0% 277.4 285.3 +2.9% FY18 Net Loadings, Policyh. Share Exchange Rate, 1H19 FY18 (2) 1H19 Infl
Slide 20: Life investments and returns reflecting our strategic asset allocation
CFO – Life Insurance 20 Life investments and returns reflecting our strategic asset allocation Life segment general account Current returns (%) €301bn €327bn €m % 2.2 2.5 2.1 2.9 2.5 1H18 4,029 1.5% 2.8 Fixed income 4.3 4.8 Other 7.8 1H19 3,902 1.4% 8.7 Cash & cash equivalent 1H18 343 2.6% Equity 33
Slide 21: Strong growth in P&C volumes at excellent technical profitability
CFO – P&C Insurance 21 Strong growth in P&C volumes at excellent technical profitability (€ m) 1H18 1H19 LFL D VOLUMES Gross written premiums, of which: 11,001 11,407 +3.9% Primary Motor 4,327 4,350 +3.1% Primary Non Motor 6,287 6,598 +3.6% PROFITABILITY Combined ratio (%) 92.0% 91.8% -0.2 p.p. Nat
Slide 22: P&C Operating result improving thanks to better underwriting profitability
CFO – P&C Insurance 22 P&C Operating result improving thanks to better underwriting profitability (€ m) ▪ Technical result strongly increased, driven +1.4% by combined ratio improvement 59 1,121 1,105 ▪ Investments result decreased due to lower (29) (14) net current income, which reflects interest r
Slide 23: Combined Ratio improving thanks to better CY loss ratio, stable nat cat impact
CFO – P&C Insurance 23 Combined Ratio improving thanks to better CY loss ratio, stable nat cat impact Combined ratio (%) Expense ratio (%) +0.7%pts -0.2%p.p. 27.9 0.8 28.6 92.0 0.7 0.7 91.8 5.4 5.5 (0.1) (0.9) 27.9 28.6 22.4 23.2 Administr. costs Acquisition costs 1H18 Δ Admin Δ Acq. 1H19 64.0 63.2
Slide 24: Stable P&C investment return reflecting proactive asset allocation shift
CFO – P&C Insurance 24 Stable P&C investment return reflecting proactive asset allocation shift P&C segment general account Current returns (%) €37.8bn €41.5bn Euro m % 5.4 5.5 1H18 354 1.3% 7.2 Other Fixed income 10.2 1H19 347 1.3% 10.6 9.8 Cash & cash equivalent 6.0 1H18 81 3.3% 6.8 8.4 Real estat
Slide 25: Asset Management Global: growth is on track
CFO – Asset Management 25 Asset Management Global: growth is on track 1H18 1H19 Δ/% Key Financials(1) (€ m) Operating Revenues 287 360 + 25% o/w management and other fees 259 325 + 25% o/w performance fees 0 2 - Operating Expenses -129 -174 + 35% Operating Result 159 186 + 17% Net result (Asset Mana
Slide 26: Holding and other improving thanks to fee businesses and private equity
CFO – Holding & Other businesses 26 Holding and other improving thanks to fee businesses and private equity (€ m) 1H18 1H19 % Financial and Other Businesses 177 272 +53.8% of which Banca Generali (1) 121 159 +30.8% of which other businesses (2) 56 113 n.a. Operating holding expenses (233) (251) +7.
Slide 27: From operating result to net profit
CFO – Profit & Loss 27 From operating result to net profit (€ m) Including: €47m: Net realised gains (€124m): Net impairments Including: Including: €10m: Fair Value through P&L (€14m): Restructuring costs €128m: gain on Belgium sale (€56m): VOBA amortization €352m: gain on Generali Leben sale (€81m)
Slide 28: Shareholders' equity up thanks to net result and market developments
CFO – Balance Sheet 28 Shareholders’ equity up thanks to net result and market developments Shareholders’ equity rollforward Shareholders’ equity sensitivities (€ m) +14.7% (€ bn) 1,789 3,506 27,059 23,601 (1,413) (423) Equities -25% -1.3 Interest rate +50bps -2.3 Shareholders' Δ in AFS 1H 2019 Net
Slide 29: Solid Solvency 2 ratio thanks to strong normalized capital generation
CFO – Solvency 2 29 Solid Solvency 2 ratio(1) thanks to strong normalized capital generation Own Excess Own Solvency II Funds SCR Funds(2) ratio (€ bn) (€ bn) (€ bn) (%) FY 2018 44.2 20.4 23.8 217% Regulatory Model Changes (0.8) 0.4 (1.2) -8%pts and opening adjustments Normalised capital generation
Slide 30: Final remarks
CFO – Final remarks 30 Final remarks Profitable growth at excellent technical margins Resilient balance sheet despite lower rates Confirmed focus on managing the life business through liabilities Strategic actions in P&C and Asset Management in line with plan © Generali August 1, 2019 First Half Res
Slide 31: Backup: Investments
31 III. Backup • Investments page 32 Financial debt page 39 Solvency 2 page 42 © Generali August 1, 2019 First Half Results 2019
Slide 32: Assets under management
Backup: Investments 32 Assets under management Total Portfolio: €606bn Breakdown by region and asset class (%) (%) 7 8 Italy 6 34 France Germany By Region CEE 20 International General Other account 24 25.5 Unit Linked 62.6 4 6 Third party 4 Equity 1 investments 12.0 Fixed income Real estate By Asset
Slide 33: External clients: reconciliation with Group disclosure
Backup: Investments 33 External clients: reconciliation with Group disclosure (June 2019) €bn 10.2 154.2 42.1 101.9 A.M. External Wealth Mgmt(¹) Pension Funds Group External Clients Assets & Others(²) Clients Assets (1) Wealth Management corresponds to Banca Generali. 42 bl include managed and banki
Slide 34: Fixed Income Portfolio
Backup: Investments 34 Fixed Income Portfolio Total Portfolio Covered Corporate Government €320bn €17bn €97bn €173bn (1) (%) (%) (%) (%) 0 10.3 7 16 15 51 1 Other fixed Income 5.4 0 30 41 33 Covered 22.1 51 44 56 Corporate non fin. 8.3 20 AAA AA A BBB Not Investment Grade Not Rated Corporate fin. Bo
Slide 35: Fixed Income Portfolio by country
Backup: Investments 35 Fixed Income Portfolio by country Total Portfolio Covered Corporate Government €320bn €17bn €97bn €173bn (%) (%) (%) (%) 4 12 10.3 Other fixed 31 Income 5.4 30 35 42 20 50 Covered 22.1 0 0 11 11 15 2 2 20 8.3 1 13 Corporate non fin. Italy France Germany CEE USA Other Corporate
Slide 36: Equity & Equity-like
Backup: Investments 36 Equity & Equity-like Alternative funds: €6.1bn Total Portfolio: €24bn Equity: €13.3bn (%) (%) (%) Life, P&C, AM and Life, P&C, AM and 13 17 Other 15 Other 30 25 Life Life P&C P&C 80 AM AM 81 Other Other 56 Equity funds: €4.5bn (%) 19 Life, P&C, AM and Listed and 12 16 Other Un
Slide 37: Asset Allocation: Real Estate
Backup: Investments 37 Asset Allocation: Real Estate (1) Total Portfolio: €28bn (1) Breakdown by use (2) 4 5 Office (%) Residential Breakdown 23 by utilization (3) Retail (%) 58 14% Logistic Investment 11 properties Other/Mixed Breakdown 1 Italy Own use by country (3) 19 (%) 31 France 86% 4 Germany
Slide 38: Backup: Financial debt
38 III. Backup Investments page 32 • Financial debt page 39 Solvency 2 page 42 © Generali August 1, 2019 First Half Results 2019
Slide 39: Focus on financial debt
Backup: Financial debt 39 Focus on financial debt Average cost & maturity of financial debt Total financial debt (%) €11.5bn €11.4bn FY18 1H19 Average cost (%) 5.66% 5.46% 425m 430m Subordinated/Hybrid 6.18% 5.21% 8,124m 7,987m Senior 4.19% 4.19% Average maturity (years) 5.34 5.33 1H18 1H19 2,983m 2
Slide 40: Financial debt breakdown by expiry date/call date
Backup: Financial debt 40 Financial debt breakdown by expiry date/call date (Nominal value - € m) 2,000 As of today already called and 1,000 repaid 1,750 1,500 1,250 1,250 500 850 553 391 500 50 50 31 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Senior Hybrid Subordinated © Generali August
Slide 41: Backup: Solvency 2
41 III. Backup Investments page 32 Financial debt page 39 • Solvency 2 page 42 © Generali August 1, 2019 First Half Results 2019
Slide 42: Reconciliation of IFRS equity to Solvency II Eligible Own Funds
Backup: Solvency 2 42 Reconciliation of IFRS equity to Solvency II Eligible Own Funds Solvency II Eligible own funds (1H19, € bn, Regulatory view) Of which: 8.6 18.2 bn net technical provisions 17.2 42.3 (0.7) 36.2 (1.9) (5.6) 28.3 7.7 (11.3) Of which: (7.2) bn Goodwill (4.1) bn Intangibles & DAC (1
Slide 43: Disclaimer
43 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 44: Next Events
44 Next Events November 7, 2019 9M19 Results release © Generali August 1, 2019 First Half Results 2019
Slide 45: Investor Relations contacts
45 Team Assicurazioni Generali Giulia Raffo Emanuele Marciante Stefano Burrino Group Head of Investor & Rating Agency Relations Credit & Rating Agency Relations Investor Relations Piazza Duca degli Abruzzi 2 34132 Trieste, Italy Giulia.Raffo@Generali.com Emanuele.Marciante@Generali.com Stefano.Burri
Slide 46: Thank you
A. GENERALI Thank you
Slide 47: GENERALI GROUP 2019 First Half Results
GENERALI GROUP 2019 First Half Results
Assicurazioni Generali — H1 2019 Earnings Presentation on 6ix