• Operating Result: EUR7.3 billion, a new record high.
• Adjusted Net Result: EUR3.8 billion, a new record high.
• Life Net Inflows: Close to EUR10 billion.
• Life Reserves: 71% related to capital-light products.
• Property & Casualty Gross Written Premiums: Increased by 7.7%.
• Combined Ratio: Improved to below 96%.
• Assets Under Management: EUR863 billion, a 32% increase.
• Asset & Wealth Management Operating Result: Grew by almost 23% to EUR1.2 billion.
• Net Holding Cash Flow: EUR3.8 billion, the highest ever reported.
• Solvency II Ratio: 220%.
• Dividend Per Share Proposal: EUR1.43, up by almost 12% year-on-year.
• Share Buyback Proposal: EUR500 million, subject to regulatory approval.

• Warning! GuruFocus has detected 4 Warning Sign with ARZGF.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Generali $(ARZGF)$ achieved record highs in operating results and adjusted net results, with EUR7.3 billion and EUR3.8 billion respectively.
• The company reported strong net inflows in the Life segment, reaching nearly EUR10 billion, driven by protection and unit-linked lines.
• Property & Casualty gross written premiums increased by 7.7%, with improvements in both motor and non-motor lines.
• The Group's total assets under management grew by 32% to EUR863 billion, supported by positive net inflows and the consolidation of Conning Holdings Limited.
• Generali (ARZGF) plans to propose a dividend per share increase of nearly 12% and a EUR500 million share buyback, reflecting strong cash flow generation and a solid capital position.

Negative Points

• Natural catastrophes had a EUR1.2 billion impact on the Property & Casualty segment, affecting the combined ratio.
• The motor insurance segment in Spain and Portugal faces challenges due to persistent inflation, requiring further pricing adjustments.
• The Life investment result is expected to be lower in 2025, with a projected EUR900 million, reflecting a conservative outlook.
• The company faces challenges in the direct insurance segment in Italy, particularly with Genertel, impacting growth in motor policies.
• The Solvency II ratio decreased to 214% at the start of the year, and the EUR500 million share buyback is not yet reflected in this ratio.

Q & A Highlights

Q: Can you discuss the strong performance in Property & Casualty (P&C) in Q4, particularly the improvement in the loss ratio, and what this means for future profitability? A: Giulio Terzariol, CEO of Insurance, explained that while the Q4 performance was strong, it should be viewed with caution due to year-end accounting adjustments. However, the underlying quality of the numbers is solid, with a 98% undiscounted combined ratio in motor. Rate increases are expected to continue, providing room for further improvement in 2025.

Q: Regarding cash management, what are the expected remittances from management actions in 2025, and how do they relate to Liberty Seguros and other measures? A: Cristiano Borean, Group CFO, stated that for 2025, capital management actions are expected to yield around EUR400 million to EUR450 million, including contributions from Italy and other actions. The Liberty Seguros capital is included in these management actions.

Q: Can you provide more details on the Life new business margin improvement in Q4 and expectations for 2025? A: Marco Sesana, Group General Manager, noted that the new business margin improvement aligns with expectations, driven by a strategic trade-off between volume and margin. The margin is expected to remain stable, with tactical adjustments based on macroeconomic conditions.

Q: What is the outlook for the Life investment margin and the impact of any one-offs in 2024? A: Cristiano Borean, Group CFO, indicated that the Life investment result for 2025 is projected at around EUR900 million, considering factors like local IFRS 17 adoption in China and shifts in capital allocation between Life and P&C segments.

Q: How is Generali planning to manage its exposure to Italian government bonds (BTPs) given recent market developments? A: Philippe Donnet, Group CEO, clarified that while the Group's BTP exposure decreased in 2024, they are considering increasing purchases in line with investment policy and risk tolerance, primarily to support the Italian life insurance business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.