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MD Perissinotto's presentation to UBS Italian Investor Conference.
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Generali Group
“Growth: hope or reality?”
Giovanni Perissinotto - CEO
Milan, January 22nd, 2010UBS Italian Financial Services Conference 2010
1Agenda
II. Insurance markets: mixed recovery
I. Uncertain, gradual economic recovery
IV. Generali 2010: solidity, efficiency, sources of growth
III. Generali in 2009
2
I. Uncertain, gradual economic recovery
3RecoveryI. UNCERTAIN, GRADUAL RECOVERY
The recovery is real,
but gradual and uncertain
4Global growth: IMF & G20 estimates
Global Growth (%, quarter over quarter annualized)
I. UNCERTAIN, GRADUAL RECOVERY
5Challenges and lessonsI. UNCERTAIN, GRADUAL RECOVERY
Regulatory responses
and lessons learned
6Regulatory responses and lessons learned
Are WorldRegulators Barking up theWrong Trees?
Stricter capital requirements for insurance:
May be excessive
And penalize the offer of long term life insurance products due to excessive capital absorption
Yet serious lessons should be drawn:
On institutions that put the whole system at risk
And the dilemma and moral hazard of “too big to fail!”
I. UNCERTAIN, GRADUAL RECOVERY
7
II. Insurance markets: mixed recovery
8
Insurance markets:
Life: opportunities
P&C: challenges
Insurance marketsII. INSURANCE MARKETS: MIXED RECOVERY
9
II. INSURANCE MARKETS: MIXED RECOVERY
European markets: life and non life in 2009
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2006 2007 2008 Sep-09
France Germany*Italy SpainUK (new business) * June-09
-4%
-2%
0%
2%
4%
6%
8%
2006 2007 2008 Sep-09
France* Germany (est.)*Italy SpainUK (R&D est.) * Excl. A&H
Life insurance trend in Europe Direct premium change (%)
Non-life insurance trend in Europe Direct premium change (%)
Source: ANIA, FFSA, GDV, ABI, ICEA Source: ANIA, FFSA, GDV, ABI, ICEA
10Italian insurance premiums: dynamics and forecasts
Life:2009: strong growth driven by savings products and banc assurance (after three years of consistent decrease)
Next years: reallocation of families’financial wealth towards life policies; slowdown of banc assurance sales; stable growth of traditional networks
P&C:2009: decreasing direct premiums, but recovery expected from the third quarter
Next years: recovery of premiums volumes expected in motor insurance due to tariff increases and in non-motor thanks to an improving economic trend
Growth rates (%)
-12,5%
-2,5%
7,5%
17,5%
27,5%
37,5%
2004
2005
2006
2007
2008
2009
E20
10E
P&C
Motor
Non Motor
LIFE
ANIA estimates a 2010 premium growth by 2-3% in non-life and 5-10% in life. Life growth was corrected by off-shore business effect (Generali R&D est.)
II. INSURANCE MARKETS: MIXED RECOVERY
11
III. Generali in 2009
12Generali in 2009
Positive recovery from topline to bottom line
III. GENERALI IN 2009
13
Solvency I ratio (%)
Net result (Euro m)
14,868
51,661
15,730
50,412
Gross written premiums (Euro m)
+8.9%(1)
3Q099M08
Shareholders’ equity (Euro m)
9M09FY08
+85.4%
132123 125
11,61211,313
13,577
+16.9%
9M 2009: results, capital
9M09 3Q08
1,670
210
894390
3Q099M08 9M09 3Q08
1H09
+1.5%(1)-46.4%
9M09FY08 1H09
(1) On like for like basis, without Intesa Vita
III. GENERALI IN 2009
14Geographical diversification: current presence in Asia
IndiaJV with the leading retailer Future Group of India
Launched Life and P&C JVs on September 2007
Multichannel approach with focus on Mallassurance
ChinaPositioning among top foreign JVs Life license granted in 2002, P&C license granted in 2007Presence in major Chinese cities (9 Life, 2 Non-life branches)Established bancassurance agreements with major domestic banks Multichannel sales approach
PhilippinesJoint Venture with a local partner (Banco de Oro)Multichannel approach with focus on bancassurance
ThailandJV with Tantipipatpong Group Multichannel approach with focus on Direct Sales
IndonesiaStartup operation launched in January 2009Exploring Bancassurance partnership with a local bank
Hong KongBranch operation -Life and Non-life
JapanBranch operation -Non-life
VietnamLicense for representative office 07.2009
III. GENERALI IN 2009
15Generali PPF Holding: the engine for profitable growth in CEE
Generali operations
in CEE
Ceska Pojistovna Group
51% 49%
Generali PPF Holding
FOCUS ON PROFITABILITY
Centralization of reinsurance activities and large risk underwriting at Holding level to balance portfolio, increase expertise and optimize use of capital
Cost saving initiatives:
Cost reduction measures at Holding levelIT infrastructure consolidation to Mogliano VenetoIntegration of operations in Slovakia and Czech RepublicFunctional integration of common activities between Croatia and Slovenia
Efficiency increases in Hungary
Initiatives for technical improvements:Enhancement of competence centers at Holding level
Development of new segmented motor tariffs
Best practice sharing in Claims HandlingImplementation of margin-increasing riders for Life products
Rebranding in Russia and Kazakhstan to profit from the strong Generali brand
III. GENERALI IN 2009
16
IV. Generali 2010: solidity, efficiency, sources of growth
17
IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH
Seeking profitabilityand the “granularity” of growth
Drivers for Generali in 2010
18Strategic drivers
Generali:
Seeking profitability and the “granularity” of growth
Our key strategic drivers for the future include:Rigorous ALM/ERM
Conservative and well established
…but also seizing capital market upside opportunities
Seeking the granularity of growth ..In mature markets: through efficiency, innovation, client orientation, distribution, integration
Through emerging market positioning and consolidation
Focus on multichannel distribution & customer satisfaction
IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH
19Italy: a challengeIV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH
Italy:recovery in a challenging
framework
20Italy: challenges and our responses
Generali:
Response to a challenging environment in 2010 and following
Challenging, but improving, context:Recovering life segment
Low interest rates, disillusioned savers
Competitive, deteriorated P&C
Catastrophes in 2009
Regulatory changes
Our responses in 2010:Increase customer care
Optimizing profitability/efficiency (cost control) more than volume
Selective underwriting/liquidation
Selective/personalized tariff setting
Selective bancassurance agreements to minimize volatility
Traditional life policies
Multichannel/multiproduct retail/SME targeted
Selective diversification of investment portfolio
IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH
21
IV. GENERALI 2010: SOLIDITY, EFFICIENCY, SOURCES OF GROWTH
Alleanza-Toro: the ball is already rolling
Legal and operational integration fully effective since October 1, 2009
Four brands/networks under one common governance
Cross selling of non life products (health) through the Alleanzanetwork already started (October 2009); extension to motor products to follow shortly
Ongoing enhancement of Toro’s life distribution capabilities
Cost synergies: administration (accounting, portfolio, etc.) already managed by Generali Business Solutions; staff & controlling functions (legal, corporate affairs, internal audit, compliance, risk management, etc.) already executed by Assicurazioni Generali
Italy: challenges and our responses
22Investor Relations Team
Stefano Burrino (Tel.: +39-040-671202)IR Manager
Email: stefano_burrino@generali.com
Veronica Cherini (Tel.: +39-040-671488)Jr. IR Manager
Email: veronica_cherini@generali.com
www.generali.com
Tel.: +39 040 671402 Fax: +39 040 671338 e-mail: generali_ir@generali.com
Emanuele Marciante (Tel.: +39-040-671347)IR Manager
Email: emanuele_marciante@generali.com
Nicoletta Mendes (Tel.: +39-040-671402)Team Assistant
Email: nicoletta_mendes@generali.com
Paola Buratti Head of Investor Relations
(Tel.: +39-040-671157)
Email: paola_buratti@generali.com
Assicurazioni Generali P.za Duca degli Abruzzi 2 34132 Trieste, Italy
23Disclaimer
Certain of the statements contained herein are statements of future expectations and other forward-looking statements.
These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties.
The user of such information should recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including, among other things, general economic and sector conditions.
Neither Assicurazioni Generali S.p.A. nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document.
The manager charged with preparing the company’s financial reports, Raffaele Agrusti, declares, pursuant to paragraph 2 of article 154-bis of the Consolidated Law on Financial Intermediation, that the accounting information contained in this presentation corresponds to document results, books and accounts records.
Generali Group
“Growth: hope or reality?”
Giovanni Perissinotto - CEO
Milan, January 22nd, 2010UBS Italian Financial Services Conference 2010
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