Assicurazioni Generali S.p.a. · MIL:G
Assicurazioni Generali — H1 2017 Earnings Presentation
48 slides from Assicurazioni Generali's earnings presentation, Aug 2, 2017
Slide 1: GENERALI GROUP 2017 First Half Results
GENERALI GROUP 2017 First Half Results The like for like change of written premiums, life net inflows, new business volumes and value is on equivalent terms (on equivalent exchange rates and consolidation area).
Slide 2: Agenda
2 Agenda I. Business Overview Page 3 Philippe Donnet – Group CEO II. 2017 First Half Group Financials Page 11 Luigi Lubelli – Group CFO III. Backup Page 34 © Generali August 2, 2017 2017 First Half Results Public
Slide 3: Business Overview
3 Agenda I. Business Overview Philippe Donnet – Group CEO © Generali August 2, 2017 2017 First Half Results Public
Slide 4: Takeaways
CEO – Business overview 4 Takeaways Generali delivering strong results and growth Strategy being executed with discipline and pace Well positioned to deliver on stated financial targets © Generali August 2, 2017 2017 First Half Results Public
Slide 5: A unique insurance Group consistently delivering excellence
CEO – Business overview 5 Generali: A unique insurance Group consistently delivering excellence SELECTED RECENT ACHIEVEMENTS AN INTERNATIONAL GROUP Improving our global footprint with discipline DEEPLY ROOTED IN EUROPE 1st Global Agent Excellence Event STRONG PROPRIETARY DISTRIBUTION NETWORK D
Slide 6: Positive results momentum
CEO – Business overview 6 Positive results momentum Profitability improved Solvency strengthened OPERATING RESULT OPERATING ROE (Euro m) (%) 12,9 13,6 2.588 2.487 +0.8p.p. +4.1% 1H 2016 1H 2017 1H 2016 1H 2017 NET RESULT SOLVENCY II RATIO (Euro m) (%) +10p.p. +13p.p. 1.221 207 FY 2016 1.178 188
Slide 7: Excellent technical performance remains a cornerstone
CEO – Business overview 7 Excellent technical performance remains a cornerstone Excellence in P&C with a combined ratio of 92.9% Life new business margin strongly improves to 4.1%1 P&C COMBINED RATIO NEW BUSINESS MARGIN AVERAGE GUARANTEE ON NEW (%) (% PVNBP) TRADITIONAL BUSINESS (Euro area, bp o
Slide 8: Strategy execution with discipline and pace
CEO – Business overview 8 Strategy execution with discipline and pace OUR IMPROVE OPERATING LONG TERM VALUE STRATEGY PERFORMANCE CREATION OUR Optimise international Rationalise the Enhance technical Rebalance our Customer & distributor Strengthen INITIATIVES footprint operating machine capabilities
Slide 9: Life business mix rapidly shifting
CEO – Business overview 9 Life business mix rapidly shifting Strong steering of business towards Reserve mix continuing to improve – on unit linked and protection track for 2018 target: €23bn capital light reserves added net in past 18 months NET INFLOW MIX CAPITAL LIGHT RESERVES (% of total) (%
Slide 10: Well positioned to deliver on stated financial targets
CEO – Business overview 10 Generali: Well positioned to deliver on stated financial targets > € 7 bn (2015-2018) cumulative Net Operating Cash ON TRACK > € 5 bn (2015-2018) cumulative dividends ON TRACK average Operating RoE > 13% (2015-2018) ON TRACK © Generali August 2, 2017 2017 First Half Result
Slide 11: 2017 First Half Group Financials
11 Agenda II. 2017 First Half Group Financials Luigi Lubelli – Group CFO Profit & Loss and Balance Sheet page 12 Business review page 20 © Generali August 2, 2017 2017 First Half Results Public
Slide 12: Key 1H 2017 financials at a glance
CFO – Key 1H 2017 financials 12 Key 1H 2017 financials at a glance 1H16 1H17 D (LFL1) VOLUMES Gross Written Premiums (Euro m) 36,947 36,604 -0.8% Life 25,816 25,302 -1.8% P&C 11,131 11,303 +1.5% Life Net Inflows 7,523 5,764 -23.0% PROFITABILITY Operating result (Euro m) 2,487 2,588 +4.1% Operating R
Slide 13: Key 1H 2017 financials at a glance – Main drivers
CFO – Key 1H 2017 financials 13 Key 1H 2017 financials at a glance – Main drivers VOLUMES GROSS WRITTEN PREMIUMS reflect the selective underwriting policy and the planned focus on protection and unit linked products. P&C growth in both Motor and Non Motor LIFE NET INFLOWS below the prior year le
Slide 14: Operating result by segment: Continued growth
Profit & Loss 14 Operating result by segment: Continued growth (Euro m) +4.1% 2,487 132 7 2,588 1 8 (46) 1H16 Life P&C Holding and other Cons. Adj 1H17 businesses 1H 17 1,614 1,095 30 (150) 2,588 1H 16 1,660 1,087 (102) (158) 2,487 D -2.8% +0.7% n.m. -4.7% +4.1% 1. Starting from the first half 2017,
Slide 15: From operating to net result
Profit & Loss 15 From operating to net result (Euro m) Including: -€ 54 m: restructuring costs -€ 52 m: VOBA amortization 2,588 (0) (392) (185) Including: 1,221 -€ 336 m: Interest costs (683) (107) Operating Non Oper. Non Oper. Net Other Taxes Minorities Net Result Investment Holding Non Oper. Resul
Slide 16: Shareholders’ equity
Balance Sheet 16 Shareholders’ equity Shareholders’ equity rollforward Shareholders’ equity sensitivities (Euro m) -3.4% (Euro bn) 24,545 1,221 23,705 (713) (1,249) (98) Equities -20% -1.1 Interest rate +50bps -2.2 Shareholders' Δ in AFS 1H 2017 Net Dividend Other Shareholders' Equity FY16 Reserve R
Slide 17: Solvency II: Strengthening on all metrics
Solvency II 17 Solvency II: Strengthening on all metrics Solvency II Regulatory view Solvency II Internal Model view (Euro bn) (Euro bn) 178%1 188%2 194% 207% 43.4 44.2 41.3 41.7 23.2 23.1 21.5 21.3 FY16 1H17 FY16 1H17 Eligible own funds Solvency capital requirement Eligible own funds Solvency capit
Slide 18: Solvency II: Internal Model View
Solvency II 18 Solvency II: Internal Model View Strong organic capital generation and net positive financial market effects Excess Own Solvency II Funds1 ratio (Euro bn) (%) FY 2016 20.2 194% Normalised capital 1.8 +9p.p. generation Variances and other 1.4 +7p.p. movements2 Accrued dividend (0.6) -3
Slide 19: Business review
19 Agenda II. 2017 First Half Group Financials Luigi Lubelli – Group CFO Profit & Loss and Balance Sheet page 12 Business review page 20 © Generali August 2, 2017 2017 First Half Results Public
Slide 20: Life key financial indicators: Successful strategy execution
Life Insurance 20 Life key financial indicators: Successful strategy execution (Euro m) 1H16 1H17 LFL D Gross written premiums 25,816 25,302 -1.8% Net inflows 7,523 5,764 -23.0% Life operating result 1,660 1,614 -2.8% Life operating ratio on investments (bps) 40 38 -2 PVNBP 23,352 22,941 -1.6% New B
Slide 21: Life Operating result by driver
Life Insurance 21 Life Operating result by driver (Euro m) -2.8% Technical margin slightly higher with strong 20 1,660 results in France and Germany offset by a 1,614 high result from certain Italian Group Life (33) (33) policies last year which did not repeat Investment result underlying resili
Slide 22: Life inflows and technical reserves: Greatly improved business mix
Life Insurance 22 Life inflows and technical reserves1: Greatly improved business mix +2.8% (Euro m) 386.0 5.8 8.6 396.9 78.1 (3.0) (0.4) 84.0 +7.5% 1H16 1H17 Italy 3,948 3,121 307.8 312.9 France 332 190 +1.7% Germany 1,468 1,313 FY16 Net Loadings, Policyh. Share Exchange 1H17 CEE 265 205 Inflows Ri
Slide 23: NBV 2017: New methodology
23 Life Insurance NBV 2017: New methodology As announced in 1Q, from 2017 onwards, new business premiums and the value of Generali Group are assessed under the Contract Boundaries rules, consistent with the Solvency II framework The Group believes the New Business Margin is more appropriately pr
Slide 24: Life New Business analysis: >50% increase in value generation
24 Life Insurance Life New Business analysis: >50% increase in value generation ∆ margin due to: Management actions +1.59 p.p. Financial assumptions -0.15 p.p. Minorities & FX impact -0.02 p.p. PVNBP X MARGIN ON PVNBP = NEW BUSINESS VALUE (Euro m) (%) (Euro m) 23,352 942 22,941 -1.6% 5.724 TOTAL 2.6
Slide 25: Life New Business: Margin improvement across all markets
25 Life Insurance Life New Business: Margin improvement across all markets PVNBP MARGIN ON PVNBP (Euro m) -1.6% (%) +2.55p.p. -7.7% 22.941 +6.59p.p. +1.50p.p. +1.44p.p. 11,20% +0.3% +1.03p.p. +12.8% +0.09p.p. +4.8% -8.2% +1.89p.p. 9.887 -2.8% 6,89% 4,58% 4,11% 4,09% 1.170 4.710 2,95% 2,63% 3.738 3.0
Slide 26: Life investment breakdown and performance: Resilient returns
Life Insurance 26 Life investment breakdown and performance: Resilient returns Life segment general account (%) Current returns Euro 349 bn Euro 351 bn Euro m % 1.4 1.6 2.1 2.3 1H16 4,805 1.6 2.9 2.8 3.8 3.8 Fixed income 7.7 7.4 Other 1H17 4,789 1.5 Cash & cash equivalent 1H16 385 2.8 Equity 37.3 36
Slide 27: P&C key financial Indicators: Confirmation of excellence
P&C Insurance 27 P&C key financial Indicators: Confirmation of excellence (Euro m) 1H16 1H17 LFL D Gross written premiums, of which: 11,131 11,303 +1.5% Primary Motor 4,363 4,517 +3.7% Primary Non Motor 6,359 6,419 +0.8% Combined ratio (%) 92.3% 92.9% +0.5p.p Nat Cat impact (%) 1.3% 0.9% -0.3p.p P&C
Slide 28: P&C Operating result by driver
P&C Insurance 28 P&C Operating result by driver (Euro m) +0.7% 1,087 50 1,095 (36) (5) Technical margin reflecting movement in combined ratio Investment result broadly stable Improved Other result due to lower net allocation to risk provisions 1H16 Technical Result Investment result Other 1H17
Slide 29: P&C gross written premiums and Combined ratio by country
29 P&C Insurance P&C gross written premiums and Combined ratio by country Total variation due to: Primary Motor +3.7% GROSS WRITTEN PREMIUMS Primary Non-Motor +0.8% COMBINED RATIO (Euro m) (%) +1.5% +9.0p.p. -3.0p.p. -1.9p.p. -1.1p.p. +0.5p.p. +1.9p.p. -0.4p.p.-1.6p.p. +1.1p.p. -4.4% +2.1% +2.2% -1.
Slide 30: Combined ratio analysis: Excellent level confirmed at 92.9%
P&C Insurance 30 Combined ratio analysis: Excellent level confirmed at 92.9% Combined ratio (%) Expense ratio (%) +0.6%pts. +0.5%pts. 27.7 0.6 28.2 5.8 (0.1) 5.7 92.3 0.6 92.9 (0.0) 21.9 22.5 27.7 28.2 Administr. costs Acquisition costs 1H16 Δ Admin Δ Acq. 1H17 Loss ratio (%) +0.0%pts. 64.7 64.6 64.
Slide 31: P&C investment breakdown and performance: Resilient returns
P&C Insurance 31 P&C investment breakdown and performance: Resilient returns P&C segment general account (%) Current returns Euro 39 bn Euro 39 bn Euro m % 3.7 4.3 1H16 399 1.5 7.4 9.3 Other Fixed income 9.6 1H17 390 1.4 9.4 Cash & cash equivalent 5.5 5.4 1H16 67 2.9 8.4 7.2 Real estate Equity 1H17
Slide 32: Holding & Other businesses segment: Strong growth in fee business
Holding & Other businesses 32 Holding & Other businesses segment: Strong growth in fee business (Euro m) 1H16 1H17 Financial 173 245 +41.9% of which Banca Generali1 84 131 +55.6% of which Other Financials (including Asset Management) 89 114 +28.8% Operating holding expenses (238) (230) -3.0% Other
Slide 33: Final remarks
Final remarks 33 Final remarks Success of our strategy demonstrated by market leading technical margins. Life inflows at a high level with improving mix, P&C premiums growing Overall profitability remains ahead of target, with Operating RoE at 13.6% Solvency strengthens even further, to 188% o
Slide 34: Backup: Investments
34 Agenda III. Backup • Investments page 35 Financial debt page 41 Solvency 2 page 44 © Generali August 2, 2017 2017 First Half Results Public
Slide 35: Assets under management
Backup: Investments 35 Assets under management Total Portfolio: Euro 530 bn Breakdown by region and asset class (%) (%) 6 Italy 10 30 France 3 Germany By Region CEE 28 EMEA 10% General 22 RoW and other operations account Unit Linked 14% 3 5 76% 4 Third party 1 Equity investments Fixed income Real es
Slide 36: Fixed Income Portfolio
Backup: Investments 36 Fixed Income Portfolio Total Portfolio Euro 348 bn Covered Corporate Government (%) Euro 25 bn Euro 116 bn Euro 177 bn1 (%) (%) (%) 8.6 0 30 10 11 6 1 8 Other fixed 12 Income 7.2 1 32 33 Covered 21.0 50 47 35 50 Corporate non fin. 12.2 11 AAA AA A BBB Not Investment Grade Not
Slide 37: Fixed Income Portfolio by country
Backup: Investments 37 Fixed Income Portfolio by country Total Portfolio Covered Corporate Government Euro 348 bn Euro 25 bn Euro 116 bn Euro 177 bn (%) (%) (%) (%) 8.6 6 14 Other fixed Income 7.2 30 43 41 12 36 33 Covered 21.0 1 0 19 10 3 Corporate non fin. 12.3 1 16 13 2 19 Italy Germany France CE
Slide 38: Equity & Equity-like
Backup: Investments 38 Equity & Equity-like Alternative funds: Euro 5 bn Total Portfolio: Euro 18 bn Equity: Euro 10 bn (%) (%) (%) Life, P&C and H&O Life, P&C and 3 13 Financial 46 49 26 Life Life P&C P&C H&O 84 5 H&O 54 Equity funds: Euro 4 bn (%) Life, P&C and H&O 20 Listed and 17 Unlisted 26 0 E
Slide 39: Asset Allocation: Real Estate
Backup: Investments 39 Asset Allocation: Real Estate Total Portfolio: Euro 25 bn1 Breakdown 4 4 Office by use(2) 11 (%) Residential Breakdown by utilization(2) Retail (%) 17 15 65 Logistic Investment properties Other/Mixed Own use Breakdown 2 by country2 Italy 20 85 (%) 31 Germany 3 France CEE 17 Ro
Slide 40: Backup: Financial debt
40 Agenda III. Backup Investments page 35 • Financial debt page 41 Solvency 2 page 44 © Generali August 2, 2017 2017 First Half Results Public
Slide 41: Focus on financial debt
Backup: Financial debt 41 Focus on financial debt Average cost & maturity of financial debt Total financial debt (%) (Euro bn) Euro 12.7 bn 1 Euro 11.9 bn 526 FY16 1H17 488 Average cost (%) 5.67% 5.70% 9,126 8,395 Subordinated/Hybrid 6.14% 6.22% Senior 4.18% 4.18% Average maturity (years) 6.72 6.72
Slide 42: Financial debt breakdown by expiry date/call date
Backup: Financial debt 42 Financial debt breakdown by expiry date/call date (Euro m) 2,595 1,750 1,500 1,399 1,250 1,250 850 750 250 2017 2018 2019 2020 2022 2024 2025 2026 2027 2028 Senior Hybrid Subordinated © Generali August 2, 2017 2017 First Half Results Public
Slide 43: Backup: Solvency 2
43 Agenda III. Backup Investments page 35 Financial debt page 41 • Solvency 2 page 44 © Generali August 2, 2017 2017 First Half Results Public
Slide 44: Reconciliation of IFRS equity to Solvency II Eligible Own Funds
Back up: Solvency 2 44 Reconciliation of IFRS equity to Solvency II Eligible Own Funds Solvency II Eligible own funds (1H17, Euro bn) 9.0 (10.7) Of which: 21.0 (6.8) 1.4 bn Bonds 6.7 bn Real Estate 1.5 (3.4) 44.2 Of which: 8.8 (6.6) bn Goodwill (4.1) bn Intangibles & DAC Of which: 24.8 (0.6) bn accr
Slide 45: Disclaimer
45 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 46: Investor Relations team
46 Team Spencer Horgan Head of Investor & Rating Agency Relations Spencer.Horgan@Generali.com +44 20 7265 6480 Stefano Burrino Martina Vono Investor Relations Investor Relations Associate Assicurazioni Generali Stefano.Burrino@Generali.com Martina.Vono@Generali.com P.za Duca degli Abruzzi 2 +39 040
Slide 47: Thank you
A. GENERALI Thank you
Slide 48: GENERALI GROUP 2017 First Half Results
GENERALI GROUP 2017 First Half Results
Assicurazioni Generali — H1 2017 Earnings Presentation on 6ix