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MILAN (Reuters)—Assicurazioni Generali S.p.A., Europe's No. 3 insurer, posted a better-than-expected quarterly profit on improved performance at its nonlife and financial businesses, a sign earnings were stabilizing after a difficult 2011.
Generali, Italy's largest insurer, said on Friday first-quarter net profit fell 8% to €567 million ($741.9 million), compared with the average Thomson Reuters I/B/E/S forecast of €500 million ($654.2 million).
Net profit in 2011 slumped 50% from the previous year after the company wrote down its entire portfolio of Greek assets by 76% in the last quarter and took impairment losses on some of its equity holdings.
"This is the best possible start to 2012, a year that will see us grow despite the challenges which remain," Chief Executive Giovanni Perissinotto said in a statement.
It reported an operating result down 2% to €1.23 billion ($1.61 billion) and confirmed a target of €3.9 billion to €4.5 billion ($5.10 billion to $5.89 billion) for the full year.
Separately, French rival AXA S.A. reported an 0.8% rise in sales as the strength in casualty insurance offset falling asset management fees and scant insurance growth.
Generali's Solvency I ratio, a measure of capital strength for insurers, stood at 133%, up from the 117% reported at the end of 2011 due to improved conditions in the Italian bond market in the first few months of this year.
Even though Italian accounting rules are among Europe's strictest for the calculation of solvency ratios, the company has still some way to go to reach the 150% Solvency I level that some analysts view as a comfort level for Generali.
Generali's total government bonds portfolio inched higher in both life and nonlife businesses, according to slides posted on its website.
Shares in Generali, which has Italian investment bank Mediobanca as its biggest shareholder, rose from the day's lows and were down 1.5%, broadly in line with the European insurance index.
The stock has fallen around 17% since the beginning of the year.