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Generali Deutschland Holding AG : Generali Deutschland continues its successful development in the first half of 2013: Group net profit on target despite the flooding

08/14/2013 | 04:26am EST

Cologne, August 14, 2013|Generali Deutschland Holding AG

Generali Deutschland Group Generali Deutschland continues its successful development in the first half of 2013: Group net profit on target despite the flooding
  • Total premiums significantly increased to € 9.9 bn (+19.5%)
  • Strong premium growth in life insurance (+30.4%)
  • Positive development in property and casualty insurance (+4.2%)

Cologne - In the first six months of 2013, the Generali Deutschland Group achieved a good Group net profit of € 224 m (first half 2012: € 238 m; in the following in brackets) despite the high net burden of more than € 50 m caused by floodings which extended over large regions in north, south and east Germany starting in the end of May 2013. This was, among other things, due to a higher net investment income. With a view to the full business year 2013 the Group net profit of the first six months is within the target corridor. The result in the first half of 2012 was mainly influenced by a positive extraordinary tax item.

Despite a persistently difficult market environment, the Group which includes, among others, Generali Versicherungen, AachenMünchener, CosmosDirekt and Central Krankenversicherung, continued its successful development in the insurance business. The total premiums of direct business increased by 19.5% to approx. € 9.9 bn. Life insurance again witnessed a particularly strong growth and achieved a 30.4% increase in premium growth. In this context, the focus was on single-premium pension insurance products. The property/casualty insurers also reached a strong premium growth of 4.2%.

"This good half-year result is a further proof of Generali Deutschland's profitability and financial strength despite the claims burden due to flooding and in times of uncertainty in capital markets. It is also very pleasing to see the positive trend in life insurance which confirms that this product remains an attractive element of retirement provision for customers also in times of low interest rates", said Dietmar Meister, Chief Executive Officer of Generali Deutschland Holding.

Premiums in life insurance strongly increased
In the first six months of 2013, the life insurers of the Group achieved total premiums of € 6,775 m in direct business, including savings portions and premiums of investment contracts. While the new business in terms of regular premiums slightly rose from € 359 m to 363 m, the single premium new business more than doubled by growing from € 1,269 m to 2,810 m. The high increases in the pension insurance products "Flexibles Vorsorgekonto" of Cosmos Lebensversicherung and "3-Phasen-Rente" of Generali Lebensversicherung were primarily responsible for this growth. The share of capitalization products in new business was reduced as scheduled. All in all, new business in terms of APE (Annual Premium Equivalent1) strongly increased by 32.6% to € 644 m.

In the first six months of 2013, the business development in health insurance was again influenced by the strategic reorientation of Central. Compared to the first half of 2012, the premium income in health insurance dropped by 3.7% to € 1,089 m. The portfolio of new business for supplementary covers, however, increased substantially. In this context, the early market positioning of Central regarding the "Pflege-Bahr" long-term care product had a particularly positive impact.

Combined ratio remains at good level
In the first six months of 2013, the property and casualty insurers of Generali Deutschland witnessed strong growth: Thanks to the Group's distribution strength and its innovative products, the gross premiums written of direct business rose noticeably by 4.2% to € 2,068 m. In addition, the trend change towards rising premiums which had already initiated in 2012, particularly in motor business, continued to have a positive impact in the first six months of 2013.

The claims expenditure increased substantially to more than € 50 m (net of reinsurance) which, besides the markedly higher contract portfolio in the wake of the business expansion, is in particular attributable to the floods in the north, south and east Germany in the second quarter. As a whole, the combined ratio thus rose by 96.1% compared to 94.7% in the first half of 2012, remaining at a good level compared to the market. The additional claims expenditure in property and casualty insurance caused by the flooding was in part be compensated by lower frost damages and a decrease in major individual claims. In addition, the average premium level increased.

Improved investment income
In the first six months of 2013, financial markets were again markedly influenced by the European sovereign debt crisis. In a market environment continuing to be volatile, Generali Deutschland succeeded in increasing its (net) investment income by € 24 m to 1,771 m, as a whole. "In view of the continuing difficult market environment which is characterized by persistently low interest rates, we were able to achieve a good net investment income and to successfully continue our safety-oriented investment strategy to the benefit of our customers ", said Dr. Torsten Utecht, Chief Financial Officer of Generali Deutschland Holding. "We pursue a balanced strategy under return and risk aspects also with regard to new investments. The focus is above all on corporate bonds and issuers of supranational bonds of high quality", Utecht went on to say.

Thanks to the good positioning of the Group in technical business, Generali Deutschland is confident to achieve the ambitious targets of the current year and, provided there are no further extraordinary claims events in the course of the year and investment income is not affected by substantially adverse impacts, Generali Deutschland maintains its net profit target.

The intensive leverage of the advantages of being part of a strong national and international Group as well as the diversity of brands and sales channels of the Generali Deutschland Group are the foundations for a sustainable and successful development. On the basis of the longstanding partnership with Deutsche Vermögensberatung and its about 37,000 financial advisors as well as the advisory strength of its sales networks and distribution partners, the Group expects to further expand its excellent market position in Germany in the retail and small to medium-sized commercial segments in 2013.

Under IFRS, according to the German regulation, technical items of the Balance Sheet and Statement of Comprehensive Income are presented based on US-GAAP.

The Group Report for the first half-year 2013 is available on the Internet at www.generali-deutschland.de (Investor Relations/Reports).

1 Market standard to determine premium income under new business, equalling regular premiums plus 10% of single premiums.

Forward-looking statements
To the extent this Release includes prognoses or expectations or forward-looking statements, these may involve known and unknown risks as well as uncertainties. The actual results and developments may therefore differ materially from the stated prognoses or expectations. Besides other reasons not specified here, deviations may be the result of changes of the overall economy or of the competitive situation, especially in core activities or core markets. Deviations may also result from the extent and the frequency of claims, lapse ratios, mortality or morbidity rates or tendencies. The developments of financial markets and of exchange rates of foreign currencies as well as amendments of national and international law, particularly in respect of tax rules, may have an influence. Terrorist attacks and their consequences may increase the probability and the extent of deviations. The company is under no obligation to update the statements made in this Release.

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Giovanni Liverani Chief Executive Officer
Antonio Cangeri Chairman-Supervisory Board
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