Generali posts best quarterly profit in 7 years
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(Reuters) — Italian insurer Assicurazioni Generali S.p.A.'s first-quarter operating profit rose 6% to top forecasts as growth in its life business offset a fall in nonlife activity.
Europe's No. 3 insurer said the figure stood at €1.33 billion ($1.51 billion), its best quarterly result in seven years.
Premiums in the first three months of the year rose 8.3% to €20.1 billion ($22.85 billion), driven by a 12.7% growth in its life business, and especially unit-linked policies.
A Milan-based broker said the results were better than expected with operating profits benefiting from stronger financial markets.
At 0740 GMT, Generali shares were up 1.1% while the Italian blue-chip index was down 0.6%.
Like its rivals, Generali has been faced with weak economic growth in its domestic market and rock-bottom interest rates that have eaten away at investment returns.
Under pressure to boost profitability and cash generation, it has bolstered its balance sheet by trimming costs and selling assets, meeting a number of recovery targets early.
In March, Chief Executive Mario Greco said the group was looking to gradually increase its dividend over the next few years.
"It's a good start to the year and augurs well for the rest of the year," Generali Chief Financial Officer Alberto Minali said in a conference call.
Italy's biggest insurer said its closely watched Solvency I ratio — an indication of financial strength — stood at 168% at the end of March, up from 156% at the end of 2014.
He said the group would provide insight as regards new Solvency II rules at its Investor Day later in May.
"The position is more than adequate," he said.
Asked about the company's 38.5% stake in Russia's Ingosstrakh, with a book value of €230 million ($261.5 million), Mr. Minali said the investment was not core.
"It's a stake we hold and then we'll see what to do with it," he said.
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