Assicurazioni Generali S.p.A.(ARZGY) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The private equity contribution operating result for the group in the first 9 months is €540 million [8] - The dividend paid by private equity in the first 9 months is €164 million [12] - The cost income ratio increased to 43% in Q3 from 37% in Q2, attributed to investments in IT and distribution [11] Business Line Data and Key Metrics Changes - The operating result split for non-Life insurance was discussed, with a focus on the reserve releases being 6% in Q3 [10] - Performance fees in asset management accounted for slightly more than €19 million in the first 9 months [12] Market Data and Key Metrics Changes - Non-life premium growth reported at 6.2%, with motor line growth at 5% and non-motor line growth at 6% [70] - Premium growth observed in Italy, France, Austria, Central Eastern Europe, and Russia, with a notable 16% increase in global corporate commercial business [72] Company Strategy and Development Direction - The company aims to achieve full integration of Cattolica through a merger, with a current ownership of 84.475% [20] - M&A is viewed as a means to diversify earnings and achieve strategic goals, with €1 billion available for potential acquisitions [33][43] Management Comments on Operating Environment and Future Outlook - Management indicated that the fourth quarter will likely see positive contributions from private equity, although not as high as the first three quarters [17] - The frequency benefits in motor insurance are not fully neutralizing, with some countries still below pre-COVID levels [21] Other Important Information - The organic capital generation for Q3 is reported at 3 percentage points of solvency capital generation [56] - The average cost in property insurance has seen a slight increase, but remains immaterial at 0.2% to 0.3% [31] Q&A Session All Questions and Answers Question: Private equity exposure results and dividend by division - Management provided the private equity contribution operating result and indicated that full details will be available in year-end numbers [8][9] Question: Non-Life operating results split - Management suggested looking at the broader 9-month results rather than focusing solely on Q3 due to high levels of natural catastrophes [10] Question: Asset management revenue margin and cost income ratio - Management confirmed that the increase in cost income ratio is not due to volatility but is part of a strategic investment in infrastructure [11] Question: Guidance for private equity gains in Q4 - Management expects a positive contribution in Q4, though not as high as the average of the first three quarters [17] Question: Options for Cattolica minority squeeze-out - Management confirmed plans to achieve full integration through a merger, with the project to be presented to the Board for approval [20] Question: Motor experience and COVID impact - Management noted that frequency benefits are not fully neutralizing and that some countries are still below 2020 levels [21] Question: Life new business margin drivers - Management highlighted better product features and a larger production of profitable products as key drivers for the strong margin [50] Question: Update on internalization of unit-linked funds - Management indicated that the internalization of unit-linked assets is progressing well and will be further communicated in December [55] Question: Organic capital generation for Q3 - Management confirmed an organic capital generation of 3% before deducting dividends [56] Question: Non-life premium growth and pricing environment - Management provided insights into premium growth across various markets, highlighting strong performance in Italy and France [70][72]