"Growth: hope or reality?"


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MD Perissinotto's presentation to UBS Italian Investor Conference.

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"Growth: hope or reality?"

  1. 1. Generali Group “Growth: hope or reality?” Giovanni Perissinotto - CEO UBS Italian Financial Services Conference 2010 Milan, January 22nd, 2010
  2. 2. Agenda 1 I. Uncertain, gradual economic recovery II. Insurance markets: mixed recovery III. Generali in 2009 IV. Generali 2010: solidity, efficiency, sources of growth
  3. 3. 2 I. Uncertain, gradual economic recovery
  4. 4. I. UNCERTAIN, GRADUAL RECOVERY Recovery 3 The recovery is real, but gradual and uncertain
  5. 5. I. UNCERTAIN, GRADUAL RECOVERY Global growth: IMF & G20 estimates 4 Global Growth (%, quarter over quarter annualized)
  6. 6. I. UNCERTAIN, GRADUAL RECOVERY Challenges and lessons 5 Regulatory responses and lessons learned
  7. 7. I. UNCERTAIN, GRADUAL RECOVERY Regulatory responses and lessons learned 6 Stricter capital requirements for insurance: Are World May be excessive Regulators And penalize the offer of long term life insurance products due to Barking up the excessive capital absorption Wrong Trees? Yet serious lessons should be drawn: On institutions that put the whole system at risk And the dilemma and moral hazard of “too big to fail!”
  8. 8. 7 II. Insurance markets: mixed recovery
  9. 9. II. INSURANCE MARKETS: MIXED RECOVERY Insurance markets 8 Insurance markets: Life: opportunities P&C: challenges
  10. 10. II. INSURANCE MARKETS: MIXED RECOVERY European markets: life and non life in 2009 9 Life insurance trend in Europe Non-life insurance trend in Europe Direct premium change (%) Direct premium change (%) 40% 8% 30% 6% 20% 4% 10% 0% 2% -10% 0% -20% -2% -30% -40% -4% 2006 2007 2008 Sep-09 2006 2007 2008 Sep-09 France Germany* France* Germany (est.)* Italy Spain Italy Spain UK (new business) * June-09 UK (R&D est.) * Excl. A&H Source: ANIA, FFSA, GDV, ABI, ICEA Source: ANIA, FFSA, GDV, ABI, ICEA
  11. 11. II. INSURANCE MARKETS: MIXED RECOVERY Italian insurance premiums: dynamics and forecasts 10 Growth rates (%) 37,5% P&C Life: Motor 2009: strong growth driven by savings 27,5% Non Motor products and banc assurance (after LIFE three years of consistent decrease) Next years: reallocation of families’ 17,5% financial wealth towards life policies; slowdown of banc assurance sales; stable growth of traditional networks 7,5% P&C: -2,5% 2009: decreasing direct premiums, but recovery expected from the third quarter Next years: recovery of premiums -12,5% volumes expected in motor insurance due to tariff increases and in non-motor E E 04 05 06 07 08 09 10 20 20 20 20 20 thanks to an improving economic trend 20 20 ANIA estimates a 2010 premium growth by 2-3% in non-life and 5-10% in life. Life growth was corrected by off-shore business effect (Generali R&D est.)
  12. 12. 11 III. Generali in 2009
  13. 13. III. GENERALI IN 2009 Generali in 2009 12 Positive recovery from top line to bottom line
  14. 14. III. GENERALI IN 2009 9M 2009: results, capital 13 Gross written premiums (Euro m) Net result (Euro m) +1.5%(1) +8.9%(1) -46.4% +85.4% 51,661 50,412 1,670 894 15,730 390 14,868 210 9M08 9M09 3Q08 3Q09 9M08 9M09 3Q08 3Q09 (1) On like for like basis, without Intesa Vita Shareholders’ equity (Euro m) Solvency I ratio (%) +16.9% 132 123 125 13,577 11,313 11,612 FY08 1H09 9M09 FY08 1H09 9M09
  15. 15. III. GENERALI IN 2009 Geographical diversification: current presence in Asia 14 China Japan Positioning among top foreign JVs Branch operation - Life license granted in 2002, P&C license granted in 2007 Non-life Presence in major Chinese cities (9 Life, 2 Non-life branches) Established bancassurance agreements with major domestic banks Hong Kong Multichannel sales approach Branch operation - Life and Non-life India Philippines JV with the leading retailer Future Group of India Joint Venture with a local partner Launched Life and P&C JVs (Banco de Oro) on September 2007 Multichannel Multichannel approach with focus on Mallassurance approach with focus on bancassurance Thailand Indonesia Vietnam JV with Tantipipatpong Group Startup operation launched License for Multichannel approach with in January 2009 representative office focus on Direct Sales Exploring Bancassurance 07.2009 partnership with a local bank
  16. 16. III. GENERALI IN 2009 Generali PPF Holding: the engine for profitable growth in CEE 15 FOCUS ON PROFITABILITY Centralization of reinsurance activities and large risk underwriting at Holding level to balance portfolio, increase expertise and optimize use of capital Cost saving initiatives: Generali Ceska Cost reduction measures at Holding level operations Pojistovna IT infrastructure consolidation to Mogliano in CEE Generali PPF Group Veneto 51% Holding 49% Integration of operations in Slovakia and Czech Republic Functional integration of common activities between Croatia and Slovenia Efficiency increases in Hungary Initiatives for technical improvements: Enhancement of competence centers at Holding level Development of new segmented motor tariffs Best practice sharing in Claims Handling Implementation of margin-increasing riders for Life products Rebranding in Russia and Kazakhstan to profit from the strong Generali brand
  17. 17. 16 IV. Generali 2010: solidity, efficiency, sources of growth
  18. 18. IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH Drivers for Generali in 2010 17 Seeking profitability and the “granularity” of growth
  19. 19. IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH Strategic drivers 18 Our key strategic drivers for the future include: Generali: Rigorous ALM/ERM Conservative and well established Seeking …but also seizing capital market upside opportunities profitability and the “granularity” Seeking the granularity of growth .. of growth In mature markets: through efficiency, innovation, client orientation, distribution, integration Through emerging market positioning and consolidation Focus on multichannel distribution & customer satisfaction
  20. 20. IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH Italy: a challenge 19 Italy: recovery in a challenging framework
  21. 21. IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH Italy: challenges and our responses 20 Challenging, but improving, context: Generali: Recovering life segment Low interest rates, disillusioned savers Competitive, deteriorated P&C Response to a Catastrophes in 2009 challenging environment in Regulatory changes 2010 and following Our responses in 2010: Increase customer care Optimizing profitability/efficiency (cost control) more than volume Selective underwriting/liquidation Selective/personalized tariff setting Selective bancassurance agreements to minimize volatility Traditional life policies Multichannel/multiproduct retail/SME targeted Selective diversification of investment portfolio
  22. 22. IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH Italy: challenges and our responses 21 Legal and operational integration fully effective since October 1, Alleanza-Toro: 2009 the ball is Four brands/networks under one common governance already rolling Cross selling of non life products (health) through the Alleanza network already started (October 2009); extension to motor products to follow shortly Ongoing enhancement of Toro’s life distribution capabilities Cost synergies: administration (accounting, portfolio, etc.) already managed by Generali Business Solutions; staff & controlling functions (legal, corporate affairs, internal audit, compliance, risk management, etc.) already executed by Assicurazioni Generali
  23. 23. Investor Relations Team 22 Paola Buratti Head of Investor Relations (Tel.: +39-040-671157) Email: paola_buratti@generali.com Stefano Burrino (Tel.: +39-040-671202) Emanuele Marciante (Tel.: +39-040-671347) IR Manager IR Manager Email: stefano_burrino@generali.com Email: emanuele_marciante@generali.com Veronica Cherini (Tel.: +39-040-671488) Nicoletta Mendes (Tel.: +39-040-671402) Jr. IR Manager Team Assistant Email: veronica_cherini@generali.com Email: nicoletta_mendes@generali.com Assicurazioni Generali Tel.: +39 040 671402 P.za Duca degli Abruzzi 2 Fax: +39 040 671338 34132 Trieste, Italy e-mail: generali_ir@generali.com www.generali.com
  24. 24. Disclaimer 23 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 recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions. Neither Assicurazioni Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document. The manager charged with preparing the company’s financial reports, Raffaele Agrusti, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Financial Intermediation, that the accounting information contained in this presentation corresponds to document results, books and accounts records.
  25. 25. Generali Group “Growth: hope or reality?” Giovanni Perissinotto - CEO UBS Italian Financial Services Conference 2010 Milan, January 22nd, 2010