Generali: half-year net profit at half mast

Operating profit was supported by growth in the life insurance (+17.1%) and damage (+3%) segments.

Italy’s number one insurance company, Generali, posted a net profit of 1.4 billion euros in the first half, down 9% due to its exposure to Russia but above market expectations.

This result, published on Tuesday, exceeded analysts’ forecasts, which had forecast an average of 1.33 billion euros, according to the consensus compiled by Generali.

The insurer spent in the first half provisions of 138 million euros due to risks related to Russia, a country where the group is gradually reducing its presence due to the invasion of Ukraine.

Provisions of 97 million euros have been recorded for fixed income investments in Russia and 41 million euros are due to its participation in the Russian insurer Ingosstrakh.

Without these provisions, the net profit would have been stable, at 1.54 billion euros, specifies Generali.

The group recorded an operating profit up 4.8% to 3.14 billion euros, once more exceeding the expectations of analysts who forecast 2.96 billion euros.

Operating profit was supported by growth in the life insurance (+17.1%) and damage (+3%) segments. Asset management fell 3.3% amid volatility in the financial markets.

The entry of gross premiums, the equivalent of turnover, increased by 2.4% to 41.88 billion euros, driven by the damage segment (+8.5%).

“Generali’s solid performance” demonstrates that the implementation of its strategic plan is “the right way to ensure sustainable growth”, in an “increasingly uncertain geopolitical and macroeconomic context”, commented its CEO, Philippe Give.

The group confirmed the objectives of its strategic plan, including 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.

Added to this is a share buyback for 500 million euros planned for 2022, which will kick off on Wednesday.

The economic solvency ratio of the third European insurer in terms of market capitalization stood at 233% at the end of June, compared to 227% at the end of 2021.

Generali announced in early March its gradual withdrawal from Russia, including the closure of its representation in Moscow.

The group withdrew from the board of directors of Ingosstrakh, of which it however still holds a 38.5% stake which it now considers “frozen”.