GENERALI STABLE GROWTH
[BIZ: Aachen/Cologne, August 11] Total premiums rise by 4.1% in the first six months — growth supported by the life and health companies. Net profit of EUR 113m as at June 30, 2009 — substantial improvement of earnings in second quarter Optimistic outlook for remaining year The Generali Deutschland Group continues its successful development in insurance business. In the first half of 2009, this second largest primary insurance group in the German market achieved premium growth of 4.1%. The growth was supported by the Group’s life and health insurers. In terms of new business, the Group also reported growth in life and health insurance, despite the persistently difficult economic environment. Earnings improved, too. For the first time since the beginning of the crisis, the Group was able to post quarterly earnings in the second quarter which were higher than those of the corresponding quarter of the previous year. In this context, Generali Deutschland benefited from stabilizing capital markets. While in the first quarter the Group had still been affected by steeply plunging prices in stock markets, there were hardly any adverse impacts in the further course of the year. In the second quarter, the net profit thus rose to EUR 83m (previous year: 69 m), leading to earnings of EUR 113 m (previous year: 134m) for the first six months of 2009. In the light of this positive development Dietmar Meister, Group Chief Executive, sees the future with optimism: “Despite the difficult economic environment we are on a good course. Our performance in insurance business reflects our distribution strength”, Meister said. “The fact that for the first time we are again in a position to report an increase of quarterly earnings compared to the previous year’s quarter makes us confident as to the development in the further course of the year. For 2009 we expect earnings to be markedly higher than in the previous year. The amount will, however, not yet be in line with the levels achieved in the years before the financial crisis. These expectations are based on the assumption that capital markets will not be affected by prices plummeting to new lows.” Distribution success in insurance business The Generali Deutschland Group has been experiencing continuous growth in insurance business. Total premiums, across all lines, rose from EUR 7,356 m in the previous year to 7,658 m in the first half of 2009; this equals a 4.1% growth rate. In line with international accounting standards (IFRS), i.e. without the savings portions of unit-linked insurance and premiums of investment contracts, the Group’s life, health and property/casualty insurers had a gross premium income totaling EUR 6,496m (previous year: 6,184 m). This growth is driven by the life and health insurers. Total premiums in life insurance grew by 5.7% to EUR 4,826m. Single premiums, which rose by about EUR 300m to 881 m, witnessed a particularly strong development. Regular premiums were at the previous year’s level of EUR 3,945m. Under IFRS reporting, the gross premiums written in life insurance amounted to EUR 3,665m (previous year: 3,360m). This equals a 9.1% growth compared to the previous year. Mainly influenced by growth in single premiums, the life new business of the Generali Deutschland Group rose by 5.1% to EUR 1,266m. New business in terms of regular premiums decreased, as expected, to EUR 385m which, however, is primarily due to an extraordinary impact: in 2008 the last Riester incentive step came into force. This particularly concerned the Group’s life insurers as they have a strong market position in Riester contracts with a business in force of currently about 1.7 m policies. In health insurance, too, the Generali Deutschland Group kept expanding its strong market position. Despite the uncertainties involved in the framework of the healthcare market, gross premiums written rose by 7.2% to EUR 978m in the first half of 2009. The growth rate is thus more than 4 percentage points above the expected market growth for the year 2009. In the first half of the year, the number of customers having a full health cover with the Generali Deutschland Group increased by somewhat more than 36,000 to about 490,000 persons. In property and casualty insurance the Group’s premium income was nearly at the previous year’s level. This is basically in line with the stagnation expected for the market in the current business year. In the first six months of 2009, the gross premiums written of the property/casualty insurers in the Generali Deutschland Group amounted to EUR 1,855m (previous year: 1,877m). Improvements in technical insurance business – half-year profit of EUR 113m despite adverse impact of financial crisis. Parallel to the good development in insurance business, the Generali Deutschland Group achieved further technical improvements in the first half of 2009. Total costs reduced by nearly 5% to EUR 769m. In this context there was the positive impact of the measures already initiated in previous years to increase competitiveness. The increase in operating expenses was almost exclusively due to the balance of calculation parameters for deferred acquisition costs. As the claims experience was more favorable than in the previous year, the combined ratio in property and casualty insurance improved by 1.5 percentage points to 95.9% as at June 30, 2009. While the technical developments in insurance business are positive, the Group is facing the adverse impact of the capital-market crisis. Early in the year, stock markets had again been affected by steeply plunging prices, followed by a noticeable recovery later in the year. Besides, bond investments also witnessed some slight consolidation. As a result, net investment income only witnessed a relatively moderate decrease from the previous year’s level of EUR 1,174m to 922m. Following the stabilization of capital markets between April and June, the Group reported an increase of its quarterly financial figures for the first time since the start of the crisis. In the second quarter, the Group net profit amounted to EUR 83 m (previous year: 69 m). Accordingly, Generali Deutschland posted a Group net profit of EUR 113m (previous year: 134m) for the first six months of 2009. Apart from the technical improvements in insurance business, the Group also benefited from the fact that no further extraordinary claims occurred after spring. Cautiously optimistic outlook for the full year – earnings primarily depend on further development of capital markets. Thanks to its market position, its distribution power and its good financial strength, the Generali Deutschland Group is well positioned to continue its successful development. In the light of the positive business performance in the first half of the year, the Group proceeds from the assumption that it will further expand its market share in the year 2009. This growth is supported by the Group’s life and health insurers. Beyond this, the Group expects to achieve further technical improvements on the basis of the developments planned in the individual business fields. In the current business year, the net profit of the Generali Deutschland Group will again depend to a substantial degree on net investment income. The Group was hit by plunging stock-market prices primarily in the first quarter of the current year. In the course of the second quarter 2009 capital markets stabilized. Provided there are no extraordinary claims and no further extremely adverse capital-market impacts, the Group thus expects earnings for 2009 to be markedly higher than in the previous year. The amount will, however, not yet be in line with the levels achieved in the
Generali Deutschland Group reports stable growth in insurance business.
years before the financial crisis. The complete Group Report 1st - 2nd Quarters 2009 is available for download on the Internet at the website.
http://www.generali-deutschland.de/