Assicurazioni Generali S.p.A.(ARZGY) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The operating result increased by 5.5%, with positive contributions from all segments [18] - The adjusted net result increased by 8% when excluding a €193 million net capital gain from the previous year [18] - The Solvency II ratio is estimated at 216%, including the impact of a €500 million share buyback [20] Business Line Data and Key Metrics Changes - In Life insurance, protection net inflows reached €1.5 billion, and unit-linked net flows were close to €1 billion [5] - The P&C business saw gross written premiums grow around 11%, or over 6% when excluding hyperinflation in Argentina [9] - The average premium in the retail and SME book increased by 6.3% compared to the previous year [9] Market Data and Key Metrics Changes - The first quarter volumes in China more than doubled year-on-year, increasing its weight in the group PVNBP from around 5% to over 8% [27] - The average guarantee of the European Life business has continued to decline [7] Company Strategy and Development Direction - The company plans to bundle solutions that address multiple customer needs within a single product [8] - There is a strong focus on new business underwriting discipline for Protection and Health businesses [7] - The strategy on pricing and technical excellence is yielding positive results, with a focus on profitable growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the group's ability to deliver solid growth and execute its strategic plan [16] - The company expects normalization of market conditions and a gradual scaling back of commercial incentives introduced last year [8] - Management anticipates that the new business margin will increase in the second quarter of 2024 as most factors normalize [29] Other Important Information - The integration of Liberty Seguros is expected to strengthen the platform as the company enters a new strategic cycle in 2025 [13] - The company experienced negligible rating downgrades in its investment portfolio [15] Q&A Session Summary Question: Premium growth in motor insurance - Management confirmed a 5.5% growth in motor premiums excluding Argentina, with effective price changes ahead of loss trends across various geographies [39][40] Question: New business margin outlook - Management indicated that while the new business margin may not immediately revert to normalized levels in Q2, it is expected to improve significantly in the second half of the year [44][46] Question: Operating variances in Q2 - Management noted that operating variances were slightly less than €200 million, with some one-off effects impacting the results [52] Question: Cash remittances and capital upstreaming - Management confirmed that around €4 billion of remittance from subsidiaries has been received, with some one-off capital synergies contributing to this figure [67] Question: Combined ratio guidance - Management reiterated guidance for the undiscounted combined ratio to be below 96%, factoring in the impact of Liberty Seguros [73][76] Question: Capital deployment in Non-Life - Management explained that capital deployment in P&C is ongoing, with a cautious approach to avoid surprises from changing loss trends [82] Question: Genertel strategy - Management clarified that the strategy for Genertel involves maintaining assets under management despite accepting lower margins to prevent lapses [98]