Generali First-Quarter Premiums Fall 8.3% on Life Business
April 30, 2011, 12:56 PM EDTBy Sonia Sirletti
(Adds executives’ comments from sixth paragraph.)
April 30 (Bloomberg) -- Assicurazioni Generali SpA, Italy’s largest insurer, said first-quarter gross premiums fell 8.3 percent, affected by a contraction of single premiums at its life-insurance business.
Total premiums decreased to 19.1 billion euros ($28.3 billion) in the first three months of 2011, from 20.8 billion euros a year earlier, Chief Executive Officer Giovanni Perissinotto told a shareholders’ meeting today in Trieste, where the company is based. Non-life premiums rose 2.1 percent to 6.8 billion euros in the period.
Generali’s first-quarter net income and operating income were higher than a year earlier, Perissinotto said, without giving figures. “We also expect 2011 earnings better than last year after the good set of results seen in the first quarter,” he said.
The company, scheduled to release results on May 13, is expanding in emerging markets, including China and the Middle East, to boost profit following the global financial crisis. Today’s meeting was overseen by Gabriele Galateri, who replaced Cesare Geronzi as chairman on April 8 following clashes with investors over governance.
Geronzi and the board reached an agreement on his severance payment of about 16.7 million euros, Perissinotto told shareholders. The settlement amount is in line with what Geronzi should have received for his three-year mandate, Perissinotto said, adding that the Italian market regulator has asked for explanations about the amount paid.
PPF Joint Venture
“A revision of Generali’s joint venture with PPF is not on the agenda,” Perissinotto told reporters following the meeting. Generali, which hired Mediobanca as adviser to examine the agreement, considers the venture strategic. “According to the preliminary conclusion of our adviser, the venture shouldn’t be modified,” he said.
Generali and PPF, an Amsterdam-based private-equity firm, formed a joint venture in 2007 to combine their insurance assets in eastern Europe to create a company with 9 million customers in 12 countries. The Italian insurer, which makes about 6 percent of its sales in central and eastern Europe, aims to grow in the region, expanding in Russia to boost profitability, the CEO said.
The company, which owns a 4.7 percent stake in Intesa Sanpaolo SpA, hasn’t decided yet if it will adhere to the 5 billion-euro rights offer announced by Italy’s second-biggest bank. “The holding isn’t a strategic investment and a decision will be taken considering the added value from a financial point of view” Perissinotto said. Generali didn’t enter Commerzbank’s share sale, he said.
Generali, which aims to cut costs this year, doesn’t plan a capital increase, according to the CEO.
--Editors: Peter Torday, Mike Harrison
G@IM Equity CN
To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net
To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net
