Generali reports best first-half profit in 10 years
(Reuters) – Italy’s top insurer Assicurazioni Generali S.p.A. posted its best half-yearly profit in a decade on Wednesday on the back of disposals and stronger operations, and said it was not concerned about exposure to Italian debt.
Europe’s third largest insurer said it expected to raise more than €1.5 billion ($1.75 billion) from asset disposals carried out this year and in 2017, above an original target of €1 billion.
Net profit in the period came in at €1.33 billion, above an analyst forecast provided by the company of €1.29 billion.
Generali has been selling businesses in a dozen or so countries around the world to raise proceeds that could be used to help fund expansion of asset management operations.
Last month it agreed to sell a majority of its German life insurance unit Generali Leben to private equity-backed Viridium for up to €1.9 billion.
In a conference call on results, chief executive Philippe Donnet said the group had accumulated cash from ordinary operations and asset sales in 2018, but declined to say how it would be used.
“We’re working on our new strategy which will be presented in November,” he said.
The group’s economic solvency ratio – a measure of financial strength – fell to 221% in the first half from last year’s 230% after market volatility following Italy’s elections.
The spread between Italy’s 10-year BTP bonds and their German equivalent rose sharply in the second quarter on worries Italy’s new ruling coalition could be euro sceptic.
“221% is an excellent level and shows we can absorb any shock on the spread... we are not concerned about our (bond) exposure,” Mr. Donnet said.
Generali holds around €60 billion of Italian state bonds, the group’s chief financial officer said.
