Generali operating profit rises 4%
(Reuters) — Italian insurer Assicurazioni Generali S.p.A. beat expectations on Wednesday with a 4% rise in first-half operating profit, boosted by nonlife business and lower costs.
Europe's No.3 insurer said first-half operating earnings came in at €2.59 billion ($3.1 billion), above an analyst forecast provided by the company of €2.51 billion ($2.97 billion).
"We expect a positive impact ... the operating result and net profit were both better than our estimates," Milan broker Banca Akros said. In early trade, Generali shares were up 0.9% while the European insurance index was flat.
But operating profit in the life segment fell 2.8% in the period as the group presses ahead with a more selective underwriting policy for savings products.
"These are excellent results ... we are not concerned in the least for the life business where premiums remain one of the biggest in the industry," CEO Philippe Donnet said.
Mr. Donnet, appointed CEO last year, is cutting costs and focusing on cash generation and the retail business to improve returns at Generali.
After fending off a possible takeover from Italy's biggest retail bank Intesa Sanpaolo earlier this year, Generali has said it is leaving markets where it lacks scale.
The insurer, controlled by influential investment bank Mediobanca, is also planning to grow its asset management business as it looks to beef up its fee income.
Generali said its economic solvency ratio — a measure of financial strength — stood at 207% from 194% in 2016.
It confirmed its strategic plan targets, which include cost cuts totaling around €200 million ($236.6 million) by end 2018.
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