Assicurazioni Generali S.p.A.(ARZGY) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Gross written premiums increased to €42.2 billion, up by 3.6% compared to the first half of 2022, driven by a 10.6% growth in the Property & Casualty segment [7][8] - Operating results rose to over €3.7 billion, a 28% increase from the first half of 2022, with the Property & Casualty segment's operating results increasing by 85.7% to €1.85 billion [10][11] - Adjusted net results increased to over €2.3 billion, up by nearly 61% from the first half of 2022, translating into a 64.6% rise in adjusted earnings per share [13][14] - The solvency ratio improved to 228%, up from 221% at the end of 2022, reflecting robust capital generation [15] Business Line Data and Key Metrics Changes - In the Property & Casualty segment, non-motor premiums grew by 10.7%, with Europ Assistance premiums increasing by 44% due to growth in the travel business [8] - Life's net inflows were negative at €877 million, with positive inflows in unit-linked and protection products, partially offsetting outflows from savings [9] - The operating results of the Asset & Wealth Management segment rose to €498 million, up by 1.3%, with Banca Generali improving by 41.2% [12] Market Data and Key Metrics Changes - The combined ratio improved by 5.4 percentage points to 91.6%, driven by a lower loss ratio [11] - The company confirmed strong growth in various geographies, with significant price increases in the motor line across major markets [30][42] Company Strategy and Development Direction - The company announced two key acquisitions aimed at strengthening its market position in insurance and asset management, including Liberty Seguros and Conning Holdings Limited [16][18] - The strategic plan "Lifetime Partner 24" is on track to meet all key financial targets set in December 2021, with ongoing updates planned [20][21] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience and profitability of the company, emphasizing the strong financial position and diversified profit sources [6][10] - The management expressed confidence in the ongoing execution of the strategic plan and the positive outlook for the second half of the year, particularly regarding tariff increases and improved profitability [20][70] Other Important Information - The company is focused on maintaining profitability through ongoing tariff adjustments and managing claims inflation, particularly in the material damage sector [68][70] - The integration of recent acquisitions is expected to enhance operational efficiency and market presence [19][86] Q&A Session All Questions and Answers Question: Inquiry on P&C combined ratio and outlook - The underlying combined ratio has deteriorated slightly, with expectations for improvement in the second half due to tariff increases and operational adjustments [22][30] Question: Lapse rates in Life insurance - The lapse rates in France and Italy have been addressed with a forward-looking measure, with management observing a slight improvement in the second quarter [26][32] Question: Operating capital generation and remittances - The company confirmed strong capital generation, with expectations for cash conversion payouts to remain valid in the new operating capital generation environment [22][28] Question: Solvency II ratio impact from lapse assumptions - A significant portion of the negative impact on the Solvency II ratio was attributed to changes in lapse assumptions, with ongoing monitoring of the situation [38][40] Question: Tariff changes by country - Management confirmed that tariff changes are being implemented across all geographies, with specific increases noted in Germany and Italy [42][44] Question: Dividend growth and future plans - The company is committed to growing dividends consistently in line with its strategic plan, with a focus on maintaining a strong capital position [80][81] Question: Outlook on combined ratio and investment income - The company is managing towards a 95% combined ratio, with expectations for stability in investment income despite potential fluctuations in discounting effects [97][101]