One of Europe’s leading insurance companies is set to embark on a cost-cutting drive, as revealed by its new chief executive.
Philippe Donnet took up the role at Italian insurer Generali
back in March, and has now revealed to The Financial Times
that he plans to tell his managers to get back to the basics of insurance – and that means improving underwriting and cost cutting.
Speaking to the publication he remarked that “things have been moving too slowly” and that “we’ve made significant moves on the financial turnaround in the past three years… now we need operational turnaround and we have to accelerate the pace.”
Focusing on life insurance, Donnet outlined that he wants the group to sell an increased number of health and protection products that don’t have the same long-term investment guarantees with lower interest rates making such guarantees harder to offer.
Elsewhere, he hopes to boost profits with costs cuts and improved discipline in the company’s underwriting commenting that “we shouldn’t wait for interest rates to go up… to avoid working on the basic of the business.”
Donnet also believes that small deals could boost the company, particular in the non-life insurance sector; while he also believes there are opportunities there to be taken in both central and eastern Europe and using the Generali
name on a wider basis is also crucial.
“The strategy at Generali
was to acquire companies and do nothing on integration or brand strategy,” he told The Financial Times
. “In some cases we have companies doing the same business but with different brands.”
So far this year, shares in Generali
are down around 34% meaning it has suffered even more than some of its rivals such as Allianz
. Donnet outlined that the only way to change things is to build credibility with long term value creation.
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