Profits tumble as Generali is struck by catastrophes

Italian insurance heavyweight announces its operating results for first nine months

Profits tumble as Generali is struck by catastrophes

Insurance News

By Paul Lucas

These are busy times for financial results and there is a common theme emerging among the major players – catastrophes have had a serious impact.

In the case of Italian insurance giant Generali, the result has been a 5% slip in profits for its property and casualty business on the back of 260 million euros worth of claims relating to natural catastrophes, such as the spate of hurricanes in the US. Indeed its net profits overall dropped back by close to 10% to 1.5 billion euros primarily due to an impairment charge the business took when it decided to sell its Dutch business to ASR for 143 million euros.

The insurer has also been stung in terms of its life insurance performance – profits dropped by 2% primarily due to higher costs.

Nevertheless, there was some good news for the firm which reported flat operating profits overall at 3.6 billion euros. It’s strongest performers, however, were outside the realm of insurance – Banca Generali, the group’s banking operation, producing the most notable success.

Overall, the firm’s solvency ratio stood at 195% at the end of September – a rise from 178% compared to one year earlier. Speaking to The Financial Times, Ralph Hebgen, an analyst for Keefe, Bruyette & Woods, noted that this was higher than expected with operating profits missing consensus forecasts.

Luigi Lubelli, the firm’s chief financial officer, remained positive, describing the nine-month results as a “strong performance” and adding that the business “continues to grow.”

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