The number one insurance company in Italy saw its net profit fall by 9.3% to 727 million euros in the first quarter, but confirmed its objectives for the year.
The number one insurance company in Italy, Generali, saw its net profit fall by 9.3% to 727 million euros (752 million francs) in the first quarter, due to impairments due to its exposure to Russia , but confirmed its objectives for the year.
This result, published Thursday, is higher than the expectations of analysts who expected an average of 651 million euros, according to the consensus compiled by Generali.
Provisions amounted to 136 million euros, stemming from risks related to Russia, a country that Generali intends to gradually leave due to the invasion of Ukraine.
Provisions of 96 million euros have been made for fixed income investments in Russia and 40 million euros are due to its participation in the Russian insurer Ingosstrakh.
The group posted operating profit up 1.1% to 1.62 billion euros, once more exceeding analysts’ expectations, which had forecast 1.55 billion euros.
These results “confirm the excellent performance of Generali, despite a context marked by uncertainty due to the conflict in Ukraine”, commented its financial director, Cristiano Borean, quoted in the press release.
The group confirmed the objectives of its strategic plan, namely an increase in earnings per share of 6 to 8% per year and cumulative dividends of 5.2 and 5.6 billion euros over the period 2022-2024.
Generali announced at the beginning of March its gradual withdrawal from Russia, with the closure of its representation in Moscow and the next stoppage of the activity of its subsidiary of Europ Assistance.
The group also withdrew from the board of directors of Ingosstrakh, of which it nevertheless still holds a 38.5% share.
Following the write-downs, the value of its share in Ingosstrakh increases to 176 million euros (compared to 384 million in 2021) and that of the fixed income investments to 40 million (compared to 188 million).
Operating profit was supported by growth in the life insurance (+7.2%) and damage (+1.2%) segments. Conversely, asset management fell by 14.5%.
Gross premium inflow, the equivalent of turnover, rose 6.1% to 22.32 billion euros, also above analysts’ forecasts.
The economic solvency ratio of the third European insurer in terms of market capitalization rose to 237% at the end of March, compared to 227% a year earlier.
The boss of Generali, Philippe Donnet, was renewed at the end of April for a third term thanks to the votes of 55.9% of the capital represented at a general meeting of shareholders.
