Assicurazioni Generali S.p.a. · MIL:G
Assicurazioni Generali — FY2019 Earnings Presentation
61 slides from Assicurazioni Generali's earnings presentation, Mar 13, 2020
Slide 1: GENERALI GROUP 2019 Results
GENERALI GROUP 2019 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
2 Agenda I. Strategy Overview Page 3 Philippe Donnet – Group CEO II. 2019 Business Review Page 10 Frederic de Courtois – Group GM III. 2019 Group Financials Page 19 Cristiano Borean – Group CFO IV. Backup Page 43 © Generali March 13, 2020 2019 Results
Slide 3: Agenda: Strategy Overview
3 Agenda I. Strategy Overview Philippe Donnet – Group CEO page 4 © Generali March 13, 2020 2019 Results
Slide 4: Key messages
GCEO – Strategy Overview 4 Key messages Record operating result at € 5.2 billion and strong normalized(1) net result growth at 6.6% Strengthened capital position with Solvency Ratio at 224% Dividend(2) increased by 6.7% to € 0.96 per share On track to deliver Generali 2021 (1) Net of Liability Manag
Slide 5: 2019: significant growth across key indicators
GCEO – Strategy Overview 5 2019: significant growth across key indicators OPERATING RESULT DIVIDEND PER SHARE (Euro mn) (Euro) +6.7% +6.9% 0.96(1) 5,192 0.90 4,857 0.85 0.80 0.72 2018 2019 2015 2016 2017 2018 2019 NORMALISED NET RESULT(2) SOLVENCY II (Euro mn) (Regulatory view, %) +8 p.p. +6.6% 224
Slide 6: Generali 2021 ambition
GCEO – Strategy Overview 6 Generali 2021 ambition Generali will be a life-time partner to its customers, offering innovative, personalized solutions thanks to its unmatched distribution network. Generali will lead the European insurance market for individuals, professionals and SMEs, while building
Slide 7: Generali 2021: significant results already achieved for each pillar of the strategy
GCEO – Strategy Overview 7 Generali 2021: significant results already achieved for each pillar of the strategy STRATEGY PILLARS 2019 ACHIEVEMENTS PROFITABLE GROWTH ▪ Strengthened leadership in Europe: • 2 nd non-life player in Portugal through acquisition of Seguradoras ▪ Strengthen leadership in Eu
Slide 8: Generali 2021: strong commitment to sustainable growth as one of the three key enablers
8 GCEO – Strategy Overview Generali 2021: strong commitment to sustainable growth as one of the three key enablers of the strategy TARGETS PROGRESS AT YEAR-END 2019 MAIN TARGETS +7-9% GWP GROWTH IN GREEN AND SOCIAL +19.8% GWP in green and social FOR RESPONSIBLE PRODUCTS 2018-2021 products BUSINESS €
Slide 9: Generali 2021: 2019 results in line with financial targets
GCEO – Strategy Overview 9 Generali 2021: 2019 results in line with financial targets PROGRESS AT TARGETS YEAR-END 2019 6%-8% ✓TRACK GROWING EARNINGS PER EPS CAGR RANGE 6.3%(1) ON SHARE 2018-2021 55%-65% INCREASING DIVIDEND DIVIDEND PAY-OUT RANGE(2) 2019-2021 63.6% ✓ON TRACK >11.5% ✓ON HIGHER RETURN
Slide 10: Agenda: 2019 Business Review
10 Agenda II. 2019 Business Review Frederic de Courtois – Group GM page 11 © Generali March 13, 2020 2019 Results
Slide 11: Key messages
GM – Business Review 11 Key messages Successful implementation of Generali 2021 strategy Profitable & diversified growth with confirmed focus on technical excellence Very solid capital position also thanks to strong capital generation Generali 2021 debt related targets already achieved © Generali Ma
Slide 12: Profitable growth driven by resilient technical performance
GM – Business review 12 Profitable growth driven by resilient technical performance OPERATING RESULT P&C COMBINED RATIO (€ m) (%) +6.9% -0.4 p.p. 5,192 4,857 93.0 92.6 FY 2018 FY 2019 FY 2018 FY 2019 NORMALISED NET RESULT(1) LIFE NEW BUSINESS MARGIN (€ m) (%) +6.6% -0.49 p.p. 4.35 3.89 2,379 2,233 F
Slide 13: Strong growth of life net inflows, mix impacted by risk appetite
GM – Business Review 13 Strong growth of life net inflows, mix impacted by risk appetite NET INFLOW BY COUNTRY NET INFLOW MIX (€ m) (% of total) FY18(1) FY19 % Italy 4,769 6,070 +27.3% Savings 16% France 1,571 2,097 +33.5% +18 p.p. 34% Germany 3,197 3,344 +4.6% Protection 35% ACEER 312 254 -27.0% 32
Slide 14: Good growth in volumes, profitability relatively resilient
GM – Business Review 14 Good growth in volumes, profitability relatively resilient PVNBP MARGIN ON PVNBP (€ m) +10.1% (%) +0.18 p.p. -0.41 p.p. -0.49 p.p. -0.59 p.p. 45,664 6.97% +5.8% 6.65% 0.00p.p. 4.71% +1.6% -0.51 p.p. 3.89% +10.1% +27.3% +2.1% 19,510 2.73% 3,895 1.78% 2,146 10,525 9,587 Italy F
Slide 15: Strong growth in P&C volumes coupled with high technical profitability
GM – Business Review 15 Strong growth in P&C volumes coupled with high technical profitability Total variation due to: Primary Motor +2.4% GROSS WRITTEN PREMIUMS Primary Non-Motor +3.8% COMBINED RATIO (€ m) (%) +3.9% -3.0 p.p. +1.1 p.p. +3.5 p.p. -0.4 p.p. +1.0 p.p. -3.1 p.p. 21,526 96.8 -0.9 p.p. 9
Slide 16: Asset Management Global: KPIs on track
GM – Business Review 16 Asset Management Global: KPIs on track FY18 FY19 Target 2021 KPIs Net result A.M. Global (€ m) 235 280 >400 External Clients Revenues 13% 33% >35% (% of operating revenues) Operating Margin (%)(1) 55% 52% >45% (1) Calculated as (1- cost income ratio) © Generali March 13, 2020
Slide 17: Asset Management Global: focus on revenues contribution and external clients AuM
GM – Business Review 17 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 (FY19): € 813 m AuM (as of December 2018) 27.2 LDI / Insurance Assets from M&A(¹) +
Slide 18: Generali 2021 execution: on track
GM – Business Review 18 Generali 2021 execution: on track STRATEGIC ITEM MAIN INDUSTRIAL KPIs GOAL STATUS ▪ Earnings CAGR 2018-2021 insurance markets Europe 3% - 6% On track PROFITABLE GROWTH ▪ Earnings CAGR 2018-2021 service-based revenue streams 7% - 10% On track ▪ Earning CAGR 2018-2021 high pote
Slide 19: Agenda: 2019 Group Financials
19 Agenda III. 2019 Group Financials Cristiano Borean – Group CFO page 20 © Generali March 13, 2020 2019 Results
Slide 20: 2019 results: successful start in Generali 2021 plan implementation
CFO – At a glance 20 2019 results: successful start in Generali 2021 plan implementation 216216 FY18 FY19 D (LFL(1)) VOLUMES Gross Written Premiums (€ m) 66,691 69,785 +4.3% Life (€ m) 46,084 48,260 +4.5% P&C (€ m) 20,607 21,526 +3.9% Life Net Inflows (€ m) 11,369 13,632 +19.6% Life Reserves (€ bn)
Slide 21: Operating Result growth across all business lines
CFO – Profit & Loss 21 Operating Result growth across all business lines +6.9% (€ m) 78 5,192 90 40 62 65 4,857 FY18 Life P&C AM Holding & Other Cons. Adj FY19 businesses FY 19 3,129 2,057 425 8 (427) 5,192 FY 18 3,067 1,992 335 (70) (467) 4,857 D +2.0% +3.3% +26.9% n.m. -8.5% +6.9% © Generali March
Slide 22: Life Insurance: growth in both volumes and earnings
CFO – Life Insurance 22 Growth in both Life volumes and earnings (€ m) FY18 FY19 LFL D VOLUMES Gross written premiums 46,084 48,260 +4.5% Net inflows 11,369 13,632 +19.6% PVNBP 43,202 45,664 +10.1% PROFITABILITY Life operating result 3,067 3,129 +2.0% Life operating ratio on investments (bps) 83 79
Slide 23: Improved technical profitability and investment result
CFO – Life Insurance 23 Improved technical profitability and investment result (€ m) +2.0% 150 349 3,129 ▪ Growth in technical margins reflecting 3,067 good developments in Italy, Germany and (436) ACEER ▪ Investment result improving thanks to lower impairments and higher realized gains FY18 Technic
Slide 24: Healthy new business value generation
CFO – Life Insurance 24 Healthy new business value generation PVNBP (€ m) X MARGIN ON PVNBP (%) = NEW BUSINESS VALUE (€ m) 43,202 45,664 4.35% 3.89% 1,877 1,777 +10.1% -0.49 p.p. -2.2% TOTAL 606 539 21,122 +15.2% 23,901 -8.2% Saving 2.87% 2.25% 735 Protection 8,819 +17.3% 8.34% 8.19% +15.2% 816 9,96
Slide 25: Net inflows drive strong growth in reserves
CFO – Life Insurance 25 Net inflows drive strong growth in reserves TOTAL LIFE RESERVES CAPITAL LIGHT RESERVES ON TOTAL(1) (€ bn) (%) +7.6% 343.4 13.6 17.9 0.5 369.4 66.1 (6.1) 79.0 +19.6% 60.5% 56.7% 277.4 290.4 +4.7% FY18 Net Loadings, Policyh. Share Exchange Rate, FY19 FY18 FY19 Inflows Risk & of
Slide 26: Resilient life investment return
CFO – Life Insurance 26 Resilient life investment return Life segment general account Current returns (%) €301bn €337bn €m % 2.2 2.4 2.1 2.9 2.5 FY18 8,025 3.0% 2.7 Fixed income 4.3 5.1 Other 7.8 FY19 7,991 2.8% 9.7 Cash & cash equivalent FY18 569 4.3% Equity 33.5 30.8 Real estate FY19 582 3.8% FY18
Slide 27: Further decrease in in-force guarantees
CFO – Life Insurance 27 Further decrease in in-force guarantees Current return (1) vs existing portfolio guarantee(2) Reinvestment return vs average new business guarantee (%) (based on premiums) (%) 3.31% 3.17% 190 bps. 186 bps. 2.01% 1.97% 1.41% 1.31% 189 bps. 195 bps. 0.12% 0.02% FY18 FY19 FY18 F
Slide 28: Strong growth in P&C volumes, excellent technical profitability
CFO – P&C Insurance 28 Strong growth in P&C volumes, excellent technical profitability (€ m) FY18 FY19 LFL D VOLUMES Gross written premiums, of which: 20,607 21,526 +3.9% Primary Motor 7,780 7,878 +2.4% Primary Non Motor 12,009 12,672 +3.8% PROFITABILITY Combined ratio (%) 93.0% 92.6% -0.4 p.p. Nat
Slide 29: Improved technical profitability coupled with stable investment result
CFO – P&C Insurance 29 Improved technical profitability coupled with stable investment result (€ m) +3.3% 135 2,057 1,992 (14) (55) ▪ Strongly improved technical result, driven by better combined ratio and volume growth ▪ Investment result slightly decreased due to lower net current income from bond
Slide 30: Excellent P&C technical profitability in spite of higher Nat Cat
CFO – P&C Insurance 30 Excellent P&C technical profitability in spite of higher Nat Cat Combined ratio (%) -0.4 p.p. Expense ratio (%) +0.5 p.p. 27.9 0.1 0.4 28.4 93.0 0.5 0.5 92.6 5.3 5.3 (0.9) 27.9 28.4 22.6 23.1 Administr. costs Acquisition costs FY18 Δ Admin Δ Acq. FY19 65.1 64.2 Loss ratio (%)
Slide 31: Stable P&C investment return
CFO – P&C Insurance 31 Stable P&C investment return P&C segment general account Current returns (%) €37.8bn €39.6bn Euro m % 5.4 6.4 FY18 719 2.7% 7.2 Other Fixed income 9.1 FY19 716 2.6% 10.6 10.1 Cash & cash equivalent 6.0 FY18 114 4.8% 7.0 Equity 8.4 Real estate 9.1 FY19 90 3.4% Equity FY18 213 5
Slide 32: Asset Management Global: growth is on track
CFO – Asset Management 32 Asset Management Global: growth is on track FY18 FY19 Δ/% Key Financials(1) (€ m) Operating Revenues 606 813 +34% o/w management and other fees 545 738 +35% o/w performance fees 0 11 n.m. Operating Expenses -271 -388 +43% Operating Result 335 425 +27% Net result (Asset Mana
Slide 33: Improved contribution from Financial and Other Businesses
CFO – Holding & Other businesses 33 Improved contribution from Financial and Other Businesses (€ m) FY18 FY19 % Financial and Other Businesses 397 538 +35.3% of which Banca Generali (1) 233 327 +40.7% of which other businesses (2) 165 210 +27.7% Operating holding expenses (467) (529) +13.3% Total (
Slide 34: From operating to net result
CFO – Profit & Loss 34 From operating to net result Including: Including: €21m: Net realised gains, including -€245m (€137m): Restructuring costs (€ m) one off from Liability Management (€137m): VOBA amortization (€333m): Net impairments (€246m): Other net non operating items (€42m): Fair Value thro
Slide 35: Increased and more diversified remittances
CFO – Cash generation & dividends 35 Increased and more diversified remittances REMITTANCE FROM OPERATIONS (1) (€ m) REMITTANCE RATIO ON DISTRIBUTABLE BUs’ IFRS NET RESULT (%) 2,545 2,923 38 253 56 Other International 198 486 2018 2019 ACEER 475 France 487 Germany Remittance ratio ca. 90% ca. 105% I
Slide 36: Growing Net Holding Cash Flow in line with targets
CFO – Cash generation & dividends 36 Growing Net Holding Cash Flow in line with targets Net Holding Cash Flow (€ m) 2018 2019 ▪ Net Holding Cash Flow up Remittance from subsidiaries (1) 2,545 2,923 10% thanks to higher remittances Result of reinsurance 260 197 ▪ Growth in net holding cash Interest &
Slide 37: Shareholders' equity up thanks to net results and AFS reserve
CFO – Balance Sheet 37 Shareholders’ equity up thanks to net results and AFS reserve Shareholders’ equity rollforward Shareholders’ equity sensitivities (€ m) +20.2% (€ bn) 4,004 2,670 28,360 23,061 (1,413) (502) Equities -25% -1.3 Interest rate +50bps -2.3 Shareholders' Δ in AFS FY 2019 Net Dividen
Slide 38: Solvency II regulatory ratio up by 8 p.p. vs. 2018
CFO – Solvency 2 38 Solvency II regulatory ratio (1) up by 8 p.p. vs. 2018 Eligible own funds vs. Required capital Key sensitivities (€ bn) (%) S-II ratio FY19 217% 224%(1) 224% 45.5 Equities +25% 229% (Δ +5p.p.) 44.2 Equities -25% 217% (Δ -7p.p.) Yield curve +50bps 236% (Δ +12p.p.) 20.4 20.3 Yield
Slide 39: Strong positive contribution from normalized capital generation
CFO – Solvency 2 39 Strong positive contribution from normalized capital generation Own Excess Own Solvency II Funds SCR Funds(1) ratio (€ bn) (€ bn) (€ bn) (%) FY 2018 44.2 20.4 23.8 217% Regulatory Model Changes (0.3) (0.1) (0.1) 0%pts Normalised capital generation 3.3 (0.2) 3.5 +18%pts Variances
Slide 40: 2019 capital generation totaling €3.5bn
CFO – Solvency 2 40 2019 capital generation totaling €3.5bn Total normalised Own Funds SCR(1) capital generation Regulatory view (€ bn) (€ bn) (€ bn) Life 1.6 1.4 (1.3) 1.5 3.2 P&C 0.9 0.0 0.9 Holdings & Other (0.6) 0.0 (0.6) Total Normalised 3.3 0.2 3.5 Capital Generation Life new business Other ca
Slide 41: High quality capital mix: Tier 1 capital 87% of total
CFO – Solvency 2 41 High quality capital mix: Tier 1 capital 87% of total Tiering of Solvency II Capital Applicable Solvency II limits (FY19) (FY19) Generali FY19 Regulatory view Solvency II Generali € bn % of total limits Regulatory view Tier 1 39.5 87% Unrestricted Tier 1 37.2 82% Restricted Tier
Slide 42: Final remarks
CFO – Final remarks 42 Final remarks Profitable growth at excellent technical margins Net result, RoE, dividend and net holding cash flow in line with targets Strong Solvency 2 position, supported by strong capital generation Successful and disciplined implementation of Generali 2021 plan © Generali
Slide 43: Backup: Costs
43 III. Backup • Costs page 44 Investments page 46 Financial debt page 52 Solvency 2 page 56 © Generali March 13, 2020 2019 Results
Slide 44: On track to deliver additional €200 million total expense reduction
Backup: Costs 44 On track to deliver additional € 200 million total expense reduction in Insurance Europe TOTAL EXPENSES REDUCTION AMBITION Insurance Europe(2), € billion 6,3 € 200 million total expense reduction (including Cost to Achieve(1)) in Insurance Europe by ~ 100 m€ 6,2 restructuring/simpli
Slide 45: Backup: Investments
45 III. Backup Costs page 44 • Investments page 46 Financial debt page 52 Solvency 2 page 56 © Generali March 13, 2020 2019 Results
Slide 46: Assets under management
Backup: Investments 46 Assets under management Total Portfolio: €630bn Breakdown by region and asset class (%) (%) 7 8 Italy 6 35 France Germany By Region CEE 20 International General Other account 24 25.7 Unit Linked 61.9 4 7 4 Third party 1 Equity investments 12.5 Fixed income Real estate By Asset
Slide 47: Fixed Income Portfolio
Backup: Investments 47 Fixed Income Portfolio Total Portfolio Covered Corporate Government €329bn €16bn €99bn €176bn (1) (%) (%) (%) (%) 0 11.5 41 7 11 5 15 Other fixed Income 5.0 0 30 43 31 Covered 21.7 42 53 56 Corporate non fin. 8.3 20 AAA AA A BBB Not Investment Grade Not Rated Corporate fin. Bo
Slide 48: Fixed Income Portfolio by country
Backup: Investments 48 Fixed Income Portfolio by country Total Portfolio Covered Corporate Government €329bn €16bn €99bn €176bn (%) (%) (%) (%) 4 11 11.5 Other fixed 32 Income 5.0 31 36 42 20 49 Covered 21.7 0 0 11 11 15 2 2 19 8.3 1 14 Corporate non fin. Italy France Germany CEE USA Other Corporate
Slide 49: Equity & Equity-like
Backup: Investments 49 Equity & Equity-like Alternative funds: €7bn Total Portfolio: €26bn Equity: €13bn (%) (%) (%) Life, P&C, AM and Life, P&C, AM and 03 23 Other Other 15 30 29 Life Life P&C 74 P&C AM AM 82 Other Other 52 Equity funds: €5bn (%) Life, P&C, AM and 19 Listed and 11 0 15 Other Unlist
Slide 50: Asset Allocation: Real Estate
Backup: Investments 50 Asset Allocation: Real Estate (1) Total Portfolio: €29bn (1) Breakdown by use (2) 3 5 Office (%) 19 Residential Breakdown by utilization (2) Retail (%) 63 14% 10 Logistic Investment properties Other/Mixed Breakdown 1 Italy Own use by country (2) 19 (%) 29 France 86% 4 Germany
Slide 51: Backup: Financial debt
51 III. Backup Costs page 44 Investments page 46 • Financial debt page 52 Solvency 2 page 56 © Generali March 13, 2020 2019 Results
Slide 52: Focus on financial debt
Backup: Financial debt 52 Focus on financial debt Average cost & maturity of financial debt Total financial debt (%) €11.5bn €11.0bn FY18 FY19 Average cost (%) 425m 5.66% 4.95% 308m Subordinated/Hybrid 6.18% 5.23% 8,124m 7,717m Senior 4.19% 4.19% Average maturity (years) 5.34 5.52 Interest expenses
Slide 53: Debt issuances breakdown by expiry date/call date
Backup: Financial debt 53 Debt issuances breakdown by expiry date/call date October 2019 (Nominal value - € m) new issuance leading to Jan 2020 € 250 m already deleverage reimbursed and not refinanced € 1,250 m January deleverage 2019 new issuance leading to 31 € 250 m deleverage 1,286 1,750 1,000 1
Slide 54: Financial leverage: peer comparison
Backup: Financial debt 54 Financial leverage: peer(1) comparison FY19 Financial leverage= financial debt/(S2 Unrestricted Tier 1 + financial debt) Generali 22.8%(2) Peer 1 24.4% Peer 2 31.9% Peer 3 36.8% (1) Peers considered in the comparison are Allianz, Aviva and Axa (2) Including the reimbursemen
Slide 55: Backup: Solvency 2
55 III. Backup Costs page 44 Investments page 46 Financial debt page 52 • Solvency 2 page 56 © Generali March 13, 2020 2019 Results
Slide 56: Focus on SCR
Backup: Solvency 2 56 Focus on SCR FY19 SCR (€ bn, Regulatory view) Pre-diversification SCR by region AG & (%) Holdings International 6% FY19 SCR before 13% 31.0 diversification Italy 35% ACEER Diversification 6.4 11% France Germany Taxes 5.5 19% 16% Pre-diversification SCR by type of risk (%) Credi
Slide 57: Disclaimer
57 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 58: Next Events
58 Next Events 13 March 2020 30 April 2020 21 May 2020 30 July 2020 12 November 2020 18 November 2020 FY 2019 Annual 1Q 2020 1H 2020 9M 2020 Investor Day results General results results results reporting Meeting reporting reporting reporting 2019 © Generali March 13, 2020 2019 Results
Slide 59: Team
59 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 60: Thank you
A. GENERALI Thank you
Slide 61: GENERALI GROUP 2019 Results
A. GENERALI GENERALI GROUP 2019 Results
Assicurazioni Generali — FY2019 Earnings Presentation on 6ix