Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Generali's profit beats expectations

Reprints
Generali

(Reuters) — Generali, Italy's top insurer, beat market expectations with its nine-month results on Thursday, as its life and asset management segments performed well, and said it has about €1 billion left to deploy as it continues to look at M&A opportunities.

The company is set to update the market on how it plans to use its available capital on Dec. 15 when it will unveil a new three-year strategic plan, finance chief Cristiano Borean said in a post-results media call.

CEO Philippe Donnet, whose term expires next April, has come under fire from two main shareholders — Italian businessmen Francesco Gaetano Caltagirone and Leonardo Del Vecchio — who have criticized his M&A strategy as too timid and want Generali to grow further.

Generali earmarked up to €4 billion euros ($4.63 billion) for M&A under a three-year strategic plan ending this year.

After a number of acquisitions in Portugal, Greece, eastern Europe and Malaysia, the insurer sealed last month a €1.17 billion takeover of smaller rival Cattolica in a move aimed at cementing its domestic market leadership.

“We are still evaluating any M&A opportunities consistent with our discipline. But M&A is not a must,” Mr. Borean said, when asked if this capital could also be used for a share buyback.

Generali's nine-month net profit rose 74% to €2.25 billion ($2.60 billion), above the average forecast of €2.13 billion in an analyst consensus provided by the company.

Its shares have gained 35% this year and were up 1.6% in early trading Thursday.

While its life and asset management businesses performed well, nonlife business proved resilient despite the higher impact of natural catastrophe claims, the company said in a statement.

Its operating profit also came in above analyst consensus as it rose 10% to €4.4 billion. Generali's solvency ratio, which measures the financial strength of the company, stood at 233% as of Nov. 8, up slightly from 231% at the end of July and 224% at the end of 2020.

The insurer confirmed its target of annual compound growth in 2018-2021 of earnings per share of between 6% and 8%. Return on equity is expected to be higher than 11.5%.