Generali has published quarterly results that exceeded expectations. Operating income, a key indicator closely monitored by the markets, rose 8.9% year-on-year to €2.1bn in Q1, driven by the strong performance of the non-life segment. This figure slightly exceeds the consensus of €2bn.
Net profit amounted to €1.2bn, above analysts' expectations (€1.1bn), although down 4.8% compared with last year, a period marked by an exceptional gain related to a disposal.
The announcement comes as Generali prepares to consider an offer from Mediobanca, which is offering €6.3bn to acquire Banca Generali, in which Generali holds a 50.2% stake. The deal is part of a banking takeover battle in Italy, with Mediobanca itself under threat of an unsolicited takeover bid from state-backed Banca Monte dei Paschi di Siena.
Mediobanca's plan would be financed by redistributing its current stake in Generali to Banca Generali shareholders, with the aim of strengthening its wealth management business.
In the insurance business, gross premiums written remained virtually stable at €26.5bn, below analysts' forecasts. The increase in premiums in the non-life business was offset by a 4.5% decline in the life business.
Generali's CFO, Cristiano Borean, explained in a conference call that this decline was due to regulatory changes in Asia, which had triggered a rush for insurance products in the first quarter of 2024, as well as commercial measures implemented in Italy and France to curb redemptions.
The group's financial strength also improved, with a solvency ratio rising to 212% from 210% at the end of March. Generali reaffirmed its commitment to achieving its 2025-2027 targets, including average annual growth in earnings per share.
According to Philip Kett, an analyst at Jefferies, "This is a high-quality result, as both underlying losses and expenses declined, offsetting a benefit from the lower discount rate. Overall, we believe the group is off to a good start with its new strategic plan."
