Assicurazioni Generali S.p.A.

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the Generali Group Half Year 2023 Results Presentation Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Please go ahead, sir.

Thank you, operator. Good afternoon and welcome to Assicurazioni Generali First Half 2023 Results Presentation. Here with us today, we have our Group CEO, Philippe Donnet, our Group General Manager, Marco Sesana, and our Group CFO, Cristiano Borean. Before starting, a quick housekeeping note. As we progress through the implementation of IFRS 17 and 9, we have made some minor updates to our 2022 preliminary comparative numbers. While the changes are negligible for the sake of completeness and accuracy, we've published an updated version of the financial supplement that we share with you on our website, and we added a dedicated slide in the backup of the results presentation. Before we open the Q&A session, let me hand it over to our group CEO for some opening remarks. Philippe, the floor is yours.

Thank you, Fabio, and thanks to all of you for joining this call. Today, we published our financial results for the first half of 2023, which are being presented under the new IFRS 17 and IFRS 9 accounting standards. These figures confirm once again that Generali is an increasingly profitable, diversified, and resilient group, and that it enjoys a strong financial position. I'd like to focus your attention on five key messages. First, our gross return premiums rose to €42.2 billion, up by 3.6% versus the first half of 2022. This was thanks to the robust growth in the property casualty segment, which rose by 10.6%, while premiums in life remained stable. Focusing on the property casualty segment, non-motor premiums improved significantly by 10.7%, achieving widespread growth across all main areas in which our group operates. It is worth highlighting that Europe Assistance premiums grew by 44% thanks to the continued increase in the travel business. The motor line rose by 11% across all the main geographies thanks to the tariff strengthening we implemented, the selective volume growth, and also the hyperinflation in Argentina. Life net inflows were minus 877 million euros, with positive net inflows in both unit length and protection, thanks to our proprietary agent distribution network, partially compensating net outflows from savings. This is in line with our strategy to reposition the life business portfolio towards more profitable capital-like products, and it also reflects the industry trends observed in the banking channels in Italy and France. Second, we recorded excellent growth both in terms of operating results and adjusted earnings. The operating result rose to over €3.7 billion, up by 28% from half-year 2022. This was driven by the strong contribution from the property casualty segment whose operating results recorded an 85.7% increase, rising to 1.85 billion euros. On the technical front, the combined ratio improved by 5.4 percentage points to 91.6%, driven by a lower loss ratio. Property casualty operating investment income increased by 26.2%, also benefiting from the acquisitions closed during 2022. The life segment was solid at 1.81 billion euros, and the new business margin was excellent at 5.81%, up by 0.31%. Let me highlight that over 40% of our new business value is generated in the highly profitable protection segment, which continues to show healthy growth rates. Furthermore, the operating results of the asset and wealth management segment rose to €498 million, up by 1.3%, with Banca Generale improving by 41.2%. Focusing on the earnings, the adjusted net result saw a substantial increase to over €2.3 billion, up by nearly 61% from half-year 2022, translating into a 64.6% rise in the adjusted earnings per share. This was driven by the improved operating results, which benefited from diversified profit sources, together with the non-recurring capital gain of 193 million euro net of taxes related to the disposal of a London real estate development. It also reflects the impact from 97 million euro impairments on Russian fixed income instruments recorded during the first half of last year. The net result also improved to €2.2 billion, up from €864 million at half-year 2022. Third, we confirmed our extremely solid capital position with the solvency ratio at 228%, up from 221% at full-year 2022. The 7 percentage points increase mainly reflected the robust contribution of the normalized capital generation at 2.7 billion euros, up from 2 billion euros at half-year 2022. Fourth, as you know, we recently announced two key acquisitions that will strengthen our market position both in the insurance and in the asset management space. The acquisition of Liberty Seguros will help generally enhance its growth profile, further develop the property casualty business, and confirm its leadership in the European insurance sector. It also underlines our commitment to Spain, where, as a result, we will reach the fourth position on the property and casualty market, and Portugal, where we will consolidate our number two position. Besides these two key markets, we will enter the Irish property casualty retail market for the first time. The transaction will also generate additional economies of scale thanks to cost reduction, IT optimization, and the opportunity for cross-selling of Generali products. On the asset management side, with Koning Holdings Limited and its affiliates, we are adding a leading global asset manager with a strong customer base in the U.S. and Asia. Koning is known for its longstanding expertise in serving insurance and other institutional clients, which makes it highly complementary to our asset management culture. The integration of Koning and its affiliates into our ecosystem, we create a combined platform with 650 billion euro in assets under management and high quality diversified capabilities across many asset classes. This acquisition is therefore key to reinforce Generali's positioning as a leading global asset manager while significantly scaling its third party business. Finally, As we have now passed the halfway mark in the execution of our strategic plan Lifetime Partner 24, Driving Growth, I confirm that we are fully on track to reach all the key financial targets we announced in December 2021. This is further proven not only to be the quality of the results we are presenting today, but more broadly by what we achieved in 2022-21. even with all the challenges and the external environment has and continues to pose. We will keep you fully updated on the progress of the plan in the upcoming month, and we are pleased to inform you that on January 30, 2024, we will be hosting an investor day. Thank you very much again for your continued interest, and generally, the floor is now open for all your questions.