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Generali profit beats analysts’ expectations

Philippe Donnet

(Reuters) — Italy’s top insurer, Assicurazioni Generali, said Tuesday it would increase prices to keep up with rising costs, and maintained its financial targets after a strong life business helped it beat first-half earnings expectations.

Generali, which on Wednesday will kick off its first share buyback in 15 years, reported a first-half net profit of €1.4 billion ($1.4 billion), above a company-gathered analyst consensus of €1.33 billion.

Net profit fell 9% year-over-year after a €138 million impairment on the company's exposure to Russia.

“Generali's life business is the standout performer year-to-date ... driving a material beat to earnings expectations,” Jefferies analysts said.

Generali confirmed all targets under its 2022-2024 strategic plan, including an average compound earnings per share growth of 6% to 8%.

The insurer has been buffeted over the past year by a boardroom battle that saw two of its top three investors challenge the reappointment of CEO Philippe Donnet.

“Results showed that implementing our strategic plan is the right way to achieve sustainable growth and to increase our operating profitability” despite growing macroeconomic and geopolitical uncertainties, Mr. Donnet told a press briefing.

Closely watched net operating profit rose 4.8% from a year earlier to €3.14 billion, above a €2.96 billion consensus forecast.

To counter the impact of rising inflation on claim costs, Generali will “significantly” increase prices in the non-life business, Mr. Donnet said.

As set out in its strategic plan, Generali will spend €500 million euros to repurchase up to 3% of its share capital by the end of this year.