Assicurazioni Generali S.p.A.

Good afternoon. This is the Corusco conference operator. Welcome and thank you for joining the Generali Group first quarter 2025 results presentation. 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 Agency Relations. Please go ahead, sir.

Hello, everyone, and thank you for joining our first quarter 2025 results call. Here with us today, we have the Group General Manager, Marco Cesana, the CEO of Insurance, Giulio Terzariola, and the Group CFO, Cristiano Borean. Before opening for Q&A, let me hand it over to Marco and Cristiano for some opening remarks.

Hi, everyone. Good morning. Let me start by saying that these results mark the first step of generally next chapter within the Lifetime Partner 27 Driving Excellence Plan presented in Venice in January. Soon after the Investor Day, the new strategy has been cascaded to the whole organization and operationalized through the setup of strategic programs. Implementation is focused to deliver seamless experience for our customer across channel and support to our advisors. Redesign of group standard on the first five critical touchpoint is already underway and will be included into the whole business unit implementation plan by September. Other programs aim to secure our objective to profitably size P&C pocket of growth, such as SME and climate. and build a leadership position in protection, health, and accident on top of transformation enablers such as shared service. On AI and data, we are scaling the development of our 16 flagship AI applications, targeting over 60% adoption in the 10 largest business units, already by the end of 2025. One example is our geospatial intelligence platform, now active in four business units that will be live in 10 within the next nine months, boosting our risk monitoring and pricing in property underwriting. As you know, this is an ambitious plan where P&C is a key driver. So coming to our first quarter result, this shows that we are off to a good start, maintaining strong P&C momentum from the previous plan. Thanks to the action we implemented and the focus on the profit pool we have described during the investor day. The P&C top line is growing strongly at 8.6%. The vast majority of this is thanks to pricing, but volumes also are picking up in non-motor. We expect this growth mix to evolve over the plan horizon with the increasing multi-holding customer and our strategic focus on health and accident driving more volume growth over time. The top line dynamics of the first quarter reflect the fact that after two years of intense pruning, we have now a very clean portfolio and we are therefore well positioned to reduce pruning while maintaining a strict underwriting discipline. Pricing continues to be conducive and in excess of risk premium across most of our geographies. The average annual premium is growing at a healthy rate of around 6%, and in motor is now growing at around 8%. We implemented double-digit tariff increases in Germany at the January renewals. Pricing remained very good in Italy, and it has improved materially in Spain in the last six to nine months. Let's look at margins. As you know, our target and our business steering are focused on the undiscounted combined ratio. However, I'm also very pleased that we achieved a reported combined ratio below 90. The combination of larger volume coming through and the sharp portfolio repricing in an environment where frequency is under control and claim inspiration has normalized makes me very confident about the future development. The improvement in the various technical metrics that we monitor at the business unit level gives me plenty of reason to expect a continuation of this positive underlying trend. We set ourselves an undiscounted combined ratio target of around 94.5% by the end of 2017, which also takes into account the volume growth we plan to achieve. Clearly, the first quarter combined ratio also benefited from positive seasonality in terms of NATCAT, with around 50 million of claims in the first quarter, with a 0.6 percentage point impact on the combined ratio, while our NATCAT budget for 2025 is at 2.8 percentage points. We have not experienced major events in the second quarter so far. Let me share that according to our preliminary estimate, the group is expected to book around 25 million of claims from the power outage in Spain in the second quarter. And that exposure to liability contracts of our client in Spain is very much contained. Now, moving to life. Let me remind you of our plan target to gather between 25 and 30 billion of cumulative life net flows in our lifetime partner plan 27. The $3 billion in the first quarter is a very strong start. These flows are driven by our preferred line of business. So we had $1.4 billion of net inflow in protection and health and $1.2 billion in hybrid and unit link. These reflect the attractiveness of our product offering, the great job done by our agent and advisor, and the strong focus on customer experience. The numbers also demonstrate the gradual and ongoing improvement of lapses in Italy. Surrenders in Italy have not yet returned to the normal level, But they are on a good trajectory. Just to give you a sense, in the first quarter, surrenders were down 20% year-on-year in Italy. As Cristiano explained in the previous calls, our CSM now reflect more conservative lapse hypotheses, so we feel comfortable with the whole development. In this environment, we maintain a discipline underwriting as our key principle. Let me share some quality data points. In the first quarter, over 81% of our new production has no guarantees. This is around 10 percentage points more than in the first quarter of last year. The average guarantee on the guaranteed new business is almost 10 basis points lower than last year. The share of new production coming from capital light products exceed 89% compared to 85% in the first quarter of 2024. The new business margin also increased by 26 basis points compared to last year. Please bear in mind that the lower interest rate environment compared to the first quarter of 24 has impacted the new business margin by 25 basis points. This means that the underlying margin of new business, excluding the market factor, has improved by over 50 basis points year on year. As you know, we use rates of January, but please consider that if we measure our margin with the interest rate at the end of the first quarter, the number would be around 15 basis points higher. It is also important to note that the first quarter new business margin is impacted by the French protection business, without which the new business margin would be around 5.4%. Going forward for the next quarter, we target a new business margin between 5.25% and 5.75% under the current interest rate environment and excluding the impact of large collective contracts that might blur the picture from quarter to quarter. Now, let me close with a final word on investment and on asset allocation. The first four months of 2025 have seen a significant financial market volatility. However, equity and credit markets have recovered most of their early April moves. Thanks to our discipline and liability-driven asset allocation, we are well positioned to manage this environment, as also demonstrated by our resilient capital position as adverse market changes occur in April. This can also be observed by the fact that excluding the volatile effect of Argentina, the current income has been increasing both in life and PNC, showing an improvement of the underlying profitability. Thanks for your attention and let me now hand over to Cristiano.