The Generali logo is on display in Milan’s CityLife district, Nov. 5, 2018. REUTERS/Stefano Rellandini/File Photo
MILAN, Aug. 2 (Reuters) – Italy’s top insurer Assicurazioni Generali (GASI.MI) said on Tuesday it would raise prices to keep up with rising costs, and maintained its financial targets after a strong life company helped boost earnings expectations for the first time. half year to beat.
Generali, which starts its first share buyback in 15 years on Wednesday, reported first-half net profit of 1.4 billion euros ($1.4 billion), above an analyst consensus gathered by the company of 1.33 billion euros.
Net profit was down 9% year-on-year after a EUR 138 million write-down on the company’s exposure to Russia.
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“Generali’s life insurance business is its best-performing year to date. See the article : High school sports; See Greater Lansing Player of the Year winners… and significantly improves earnings expectations,” Jefferies analysts said.
Generali reaffirmed all targets under its 2022-2024 strategic plan, including an average compound earnings per share growth of 6%-8%.
The insurer was beset by a boardroom battle over the past year in which two of the three largest investors challenged the reappointment of CEO Philippe Donnet.
“The results showed that implementing our strategic plan is the right way to achieve sustainable growth and increase our operational profitability,” despite growing macroeconomic and geopolitical uncertainties, Donnet told a news conference.
Closely monitored net operating income rose 4.8% year-on-year to 3.14 billion euros, above a consensus forecast of 2.96 billion euros.
The insurer’s shares fell 1.4% at 0745 GMT, slightly underperforming a negative European insurance sector (.SXIP), with traders saying the stock had outperformed in the past three days.
To counteract the impact of rising inflation on claims costs, Generali will raise prices in the non-life business “significantly,” Donnet said.
Generali, a major holder of Italian government bonds, cut its domestic government portfolio in June from €63 billion in December to €53 billion, said Cristiano Borean, head of finance.
The move reduces Generali’s exposure to rising premiums on Italian bonds, which have suffered from macroeconomic concerns as interest rates rose and Russia cut gas exports, and are now further in the crosshairs of markets ahead of snap elections in Italy next month.
Borean also said Generali had sold more life insurance products that committed less capital.
The solvency ratio, a measure of an insurer’s financial standing, stood at 223% on July 29, compared to 233% at the end of June due to market turmoil and the acquisition of French health insurer La Medicale.
As set out in its strategic plan, Generali will spend EUR 500 million by the end of this year to buy back up to 3% of its share capital.
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Additional reporting by Giancarlo Navach, editing by Valentina Za and Susan Fenton Read also : Nikola founder asks judge to block evidence of “wealth”, “lifestyle” in fraud case.
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