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Generali proposes dividend hike as FY'17 operating profit hits 'record high'

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Generali proposes dividend hike as FY'17 operating profit hits 'record high'

Generali will propose increasing dividend payments for 2017 as it posted a "record high" operating profit for the year.

The Italian insurer's operating result reached €4.90 billion in 2017, up from the year-ago €4.78 billion, driven by the "positive" performance of the life segment and the investments, asset and wealth management business, as well as Generali having reached its cost reduction target of €200 million in mature markets two years ahead of schedule.

Operating return on equity was unchanged year over year at 13.4%.

The operating result in the life segment rose year over year to €3.14 billion from €3.08 billion, while the property and casualty division booked an operating result of €1.97 billion, down from €2.07 billion a year earlier. The operating result of the holding and other businesses segment amounted to €59 million, compared to a year-ago loss of €74 million.

The insurer said its board will propose a dividend of 85 cents per share for 2017, up from 80 cents per share for 2016.

Generali's full-year 2017 consolidated result attributable to the group amounted to €2.11 billion, up from €2.08 billion in 2016. EPS for the year was €1.33, compared to €1.32 in 2016.

Net earned premiums totaled €64.60 billion, down from the year-ago €64.94 billion. Fee and commission income and income from financial service activities ticked up year over year to €1.08 billion from €959 million. Net income from financial instruments at fair value through profit or loss rose to €5.33 billion in 2017 from the year-ago €1.78 billion.

Net insurance benefits and claims rose on a yearly basis to €65.75 billion from €63.62 billion.

The combined ratio — a measure of underwriting profitability — in the P&C segment stood at 92.8% in 2017, compared to 92.3% in 2016.

Generali's regulatory solvency ratio — which represents the regulatory view of the group's capital and is based on use of the internal model solely for companies that have obtained the relevant approval from Italian insurance supervisory authority IVASS and on the standard formula for other companies — stood at 208% at 2017-end, compared to 178% at 2016-end.

The economic solvency ratio, which represents the economic view of the group's capital and is calculated by applying the internal model to the entire group perimeter, stood at 230% at the end of 2017, compared to 194% a year earlier.

In light of its results, group CEO Philippe Donnet said the company is "perfectly positioned" to reach its targets for 2018, including an average operating ROE of more than 13%. The group is due to unveil its targets for the 2019-2021 period Nov. 21.