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I gave you all the love I had in me. And I can't believe it's true. Going on. It's not that easy when you're Good afternoon. This is the Chorus Call conference operator.
3m 34s
Welcome and thank you for joining the Generali Group First Quarter twenty twenty five Results Presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. At this time, Head of Investor and Rating Agency Relations. Please go ahead, sir.
4m 5s
Hello, everyone, and thank you for joining our first quarter twenty five results call.
4m 10s
Here with us today we have the Group General Manager, Marco Sesana the CEO of Insurance Bureau Terzareola and the Group CFO, Cristiano Borja, Before opening for Q and 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 Generali 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 touch point is already underway and will be included into the all business unit implementation plan by September. Other programs aim to secure our objective through [indiscernible] Profitably size P and 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 application targeting over 60% adoption in the 10 largest business units already by the end of twenty twenty five.
5m 40s
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 and 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 and 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 and 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 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.
7m 8s
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 under 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 claiming inflation has normalized makes me very confident about the future development. The improvement in the various technical 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 twenty twenty seven. Which also takes into account the volume growth we plan to achieve. Clearly, the first quarter combined ratio also benefited from positively positive seasonality in term of nat cat with around €50,000,000 of claims in the first quarter with a 0.6 percentage point impact on the combined ratio.
8m 43s
While our nat cat budget for 2025 is at 2.8 percentage point. 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 €25,000,000 of claims from the power outage in Spain in the second quarter. And debt exposure to liability contracts of our in Spain is very much contained. Now moving to Life. Let me remind you of our planned target together between 25 and €30,000,000,000 of cumulative life net flows in our Lifetime Plan twenty seven. The €3,000,000,000 is the first the three billion euros in the first quarter is a very strong start. These flows are driven by our preferred line of business. So we had €1,400,000,000 of net inflow in Protection and Health and €1,200,000,000 in Hybrid and unit linked. This reflects the attractiveness of our product offering the great job done by our agent and adviser, and the strong focus on customer experience. The numbers also demonstrate the gradual and ongoing improvement of lab ses in Italy. Surrenders in Italy have not yet returned 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.
10m 22s
As Cristiano explained in the previous calls, our CSM now reflect more conservative lapse hypothesis. So we feel comfortable with the whole development. In this environment, we maintain a disciplined 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 exceeding 89% compared to 85 in the first quarter of twenty twenty four. [indiscernible] The new business margin also increased by 26 basis points compared to last year. Please bear in mind that the lower interest rate environment to the first quarter of twenty twenty four has impacted the new business margin by 25 basis points. This mean that the underlying margin of new business excluding the market factor has improved by over 50 basis points year on year. Additionally, 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 point higher.
11m 53s
It is also important to note that the first 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 targeted new business margin between five point two five and five point seven five. Percent. Under the current interest rate environment, and excluding the impact of large collective contracts 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, as seen a significant financial market volatility. However, equity and credit market have recovered most of their early April moves. Thanks to our discipline and liability driven allocation, we are well positioned to manage this environment as also demonstrated by our resilient capital position as adverse market changes occur in April. These can also be observed by the fact that excluding the volatile effect of Argentina, the current income has been increasing both in Life and P and C showing an improvement of the underlying profitability. Thanks for your attention and let me now hand over to Cristiano. Thank you, Marco, and hello everyone. Let me provide you some additional color on our first quarter performance to complement what you've just heard on the underlying business trends.
13m 28s
Starting with Life, the CSM is up in the quarter with a normalized growth of 1.3%. Also thanks to the positive seasonality of the new business the beginning of the year. Most of the CSM walk is already available in the press release. Let me add for completeness that we recorded positive economic variances of €57,000,000 and negative operating variances of €77,000,000 So the overall variances were broadly flat in the quarter. The economic variances benefited from higher interest rates and rising share prices in Europe but this was partly compensated by the fact that non European equities posted negative returns. Less than half of our equity exposure in the general account is to listed equities and around half of the non listed equity portfolio is denominated in U. S. Dollars. Which has depreciated versus the euro during the quarter. So this explains to you why we have enjoyed only moderate economic variances. Moving to operating variances. Let me flag that they are in entirely due to a specific one off impact from a regulation change on the stamp duty on unit linked reserves in Italy, which also impacted the Solvency II ratio. This is a one and done and with no additional impact in the future. [indiscernible] also means that we basically did not experience negative operating variances from lapses compared to around €200,000,000 experienced in the first quarter of twenty twenty four.
15m 19s
The CSM release ratio of 2.5% slightly increased compared to 2024. Reflecting, as I mentioned at the Investor Day, our conservative methodology on VFA. Considering the release ratio mechanics of the year, which can also be influenced by changes in the underlying portfolio due to both in force movements and new production I expect our full year 2025 CSN release ratio to be at the mid high end of our 8% to 10% guidance. On the Life operating investment result, we provided in the press release the key drivers of the year on year change and I'm happy to elaborate on them in the Q and A. Let me, however, confirm our guidance for a full year 2025 life operating investment result of around 900,000,000 dollars Moving to P and C. The key takeaway for me is that there is a powerful combination of top line growth coupled with margin expansion at the heart of what you see in the numbers we reported. With the P and C operating insurance service result, growing 180,000,000 quarter on quarter year on year. This is a growth rate of over 25%. And of course, we are very pleased by it. And it was achieved despite less discounting and conservative initial loss.
17m 4s
Picks.
17m 5s
Without these two effects, the attritional loss ratio would have improved even more The direction of travel we see points to a non discounted combined ratio potentially below 95%. In 2025. Subject to, of course, the possible volatility stemming from the natural catastrophes. As we discussed previously, we changed the threshold to classify an event does not cut from 5,000,000 ten million At the risk of stating the obvious, this will lead to a bit more volatility in the attritional loss ratio from one quarter to the next. For example, in the first quarter, we had around 20,000,000 of cumulative claims that would have been classified as nat cat with the previous threshold. Which have worsened the attritional loss ratio by almost 25 basis points. Therefore, going forward, it will be important to focus on the underlying business trends and to be able to dissect the signal from the noise in the quarterly moves. Especially when it comes to the non motor portfolio where this slightly higher volatility is inherently more present. Present. On prior year, some of you may ask why we had a prior year development above two percentage points in a quarter of benign nat cat. There are two very simple explanations.
18m 47s
First of all, in the first quarter, the lower revenue base amplifies the volatility of prior year development. Secondly, we had the release from some specific loss provision on large claims. Settled. Let me reiterate that we expect a 2% percentage points prior year development across the the cycle, reflecting the prudence that we always exercise on the initial loss picks. However, you should not be surprised if there are quarters where this figure deviates from 2%, especially when the revenue base is smaller like in the first quarter. Finally, in P and C, in the press release, we explained that excluding Argentina, the P and C investment income is up The first quarter bears the burn of Argentina effect because the improvement in inflation in Argentina accelerated in the second quarter of twenty twenty four. And therefore, the differential between the first quarter of twenty twenty four and the first quarter of twenty twenty five is the highest This means that the remainder of the year will be better on this front. And this is why I am confident to achieve the $950,000,000 guidance for the 2025 P and C investments result. Concerning holding another I think that what will be important going forward is to consider that this segment will record some project costs related to the strategic we defined for the new plan, which will material materialize primarily in 2025 in a range between €25,000,000 and €15,000,000 more compared to 2024.
20m 42s
Moving to solvency. Our capital generation is robust and has confirmed its resilience. The 210% Solvency II ratio reflects the strong capital generation the diversified business model and our disciplined asset allocation allocation. All key strengths in a volatile environment. The market factors I mentioned for the CSM apply also here for the solvency. I would like to emphasize that capital generation in the first was strong We had four percentage points, but this includes the impact of around $300,000,000 from the buyback related to the long term incentive plan. So just excluding the long term incentive plan effect, our normalized capital generation would have been in the order of $1,400,000,000 or close to six percentage points so a very healthy start of the year, reflecting the positive underlying dynamics across the business. As I did last year, let me also share the fact that as of today, we have received over 95% of the remittance we planned for 2025. As we always do, we scheduled the collection of almost the entirety of the remittance to the parent company before we pay the dividend to the market. To summarize, we started the Lifetime Partner '27 Driving Excellence plan with a strong quarter.
22m 20s
Revenue growth margin expansion, positive business dynamics that will continue to unfold across the group and a resilient capital position. We manage the business for the long term, with a focus on value creation for our investors as also reflected in an adjusted earnings per share that is growing at 9.4 year on year and with a relentless focus on keeping a strong nexus between the accounting result cash generation and the solid capital position. Thank you for your attention. Operator, we are now ready for Q and A. Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who has a question may press star and one. The first question is from Andrew Baker, Gold Goldman Sachs. Please go ahead.
23m 31s
Great. Thank you for taking my questions.
23m 34s
The first one, just on the P and C combined ratio. So thanks for the additional detail on the cat volatility and the attritional. Are you able to give us any sense of the man made losses in the quarter? Through the attritional? How this compared to last year? Then also how you're thinking about sort of manmade losses or what your assumption is going forward that runs through the attritional? And then secondly, I'm going to give it a go, we'll see what we get on this. But is there anything at all you're able to say on the Mediobanca bid for Banca Gennuali, whether that be your views or failing that, sort of how we should think about any next steps in the process going forward?
24m 12s
Thank you very much, Andrew. At this time, we have no further comments on the Banca Generali offer. While for the first question, I hand it over to Cristiano. Yes. Good morning, Hendu. So what we observed as an amount of effect in the first quarter was an effect of man made of €35,000,000 compared to €54,000,000 in first quarter twenty twenty four. As you know, man made by nature is the real nitty gritty job of insurance should be part of the attritional and should be managed with a little bit of a pinch of salt because clearly they can move from one quarter to the other. What I can confirm is the strict [indiscernible] underwriting discipline that has been made and improved pricing capability, which is also managing it. What I I can tell you that going forward, the assumption clearly could be volatile, but we are talking of something on the order of 0.7%, slightly less than one percentage point of impact. With clearly a pinch of salt. And as you know, there is always a balance and the fact that we are having initial loss picks prudent allows us to manage also this kind of volatility.
25m 40s
Great. Thank you so much.
25m 41s
Next question, please.
25m 43s
The next question is from Michael Huttner, Berenberg. Please go ahead.
25m 48s
Thank you so much. And I think the results are good, but I think your presentation was outstanding. It was almost like listening to some of the best analysts on the street, mean, my colleagues. Really amazing. So I I I'm struggling for questions. I've got two. Pricing, could you give us a little bit more color? You said it's ahead of claims costs. Which is lovely, but maybe a little bit more color maybe by geography. So clearly, obviously, Germany, you're making a ton of money, but maybe you can speak a bit about some of the other main markets and that huge improvement Spain, whether that can continue. And then you also highlighted the prudence in the loss picks. I just wanted to get a feel. My guess is that you fully offset the higher prior year development, but I don't know, any feel on that would be great. Thank you.
26m 39s
Thank you very much, Michael. The first question is for Giulio, while the second one is for Tatiana.
26m 45s
Hi, Michael. Thank you for the question. So when maybe we are focusing on more In general, what we see on the motor line of business, is the average earned premium. Is going up about 8% and the risk premium is going up 3%. So we have a spread between the two the items of about five percentage point, which is a very good spread. And this is explaining also the improvement that we see in our motor results. And we expect also to have improvement as we go further into 2025. When we look at the geography, I can tell you that in general we have a good pitch in all geographies. So in Italy we have average earn which is well above the risk premium. So substantially so think about more than five percentage point of spread. The same in Germany where we have actually rate increases which are double digit. There is a little bit more inflation in Germany compared to what we see in geography, but fundamentally we have a very good spread between the average premium, risk premium also in Germany. France is also a positive spread. So basically I would tell you that a across the board we see positive development.
27m 57s
And with regard to Spain, we have double digit rate increases in Spain and we have basically spread to the risk premium which is about percentage point also there. What we saw in Spain, we see an improvement in the motor combined ratio. The improvement has been a little bit clouded by some large losses. But we didn't see, for example, these large losses happening in April or in the May. So from that point of view, we expect to see a further improvement in Spain. And I would like to remind you that if you run the combined ratio of Spain and we are basically at 94 combined ratio. So overall when you put together motor on motor the Spanish business is performing with a good level of combined ratio, but we think we can do even better. So overall, I will say it's a very strong picture. We are very pleased with the results. And also, we know that there is still some improvement that we can realize in the course of 2025.
29m 2s
Good morning, Michael. So regarding the second point, I start with the end sentences. You have done a very educated guess. And I go to explain it dedicating few more topics out. Don't forget that on top of this 50 bps, there are 25 bps of the additional loss ratio impact from the change definition of the threshold. So you should add the two top the two together. On top of that, I would recall you that in the prior year development, maybe this is some, let's say, nitty gritty point which could help any one of you better understand There is an asymmetric like in the discounting, there is an asymmetric pattern throughout the year on the prior year release of the risk which is higher in the first quarter and goes down in the second quarter, which is counterbalanced and reflected in the loss ratio part which is again with a higher risk adjustment negative impact while it is in the prior year positive. So when looking at these quarters, especially if you don't look on an homogeneous quarter, first quarter versus this quarter, you compare other quarters, this is an effect from two different quarter, which are not the same.
30m 18s
If they are agent, has a 0.7 percentage point negative impact if you compare to the fourth quarter of, for example, 24% higher in the current year. Okay, which shows you that it is important really to compare the quarter the proper open proper side. There are these effects and the prudence I was mentioning. That's why our comment were particularly positive on what we have seen [indiscernible] and also with the prudence in the balance sheet.
30m 51s
Fabulous. Thank you very much.
30m 53s
Thank you, Michael. Next question please.
30m 55s
Next question is from Farooq Hanif at JPMorgan.
31m 1s
Hi. Thanks very much. You talked about non motor and going into accident and health. That was mentioned by Marco at the beginning. Can you give a bit more detail on the products that you're really focusing on in non motor? And are you able to give us a comp you know, combined ratio comparison again between non motor and motor, just give us an idea of the mix effects there. Secondly, the discounting effect for me anyway, was a little bit larger in one quarter. And I know that you know, that usually the effect is higher in the beginning and lower at the end. Do you have any change in view on the level of discounting effect for the full year I guess the last point question is, you know, we're seeing a lot of very good pricing supporting the top line. Given, you know, in retail markets, you know, these pricing cycle tend to be quite shallow. What's your kind of expectation about when you think the industry will see rate adequacy? And when you think this kind of level of pricing is going to normalize in terms of the growth rate and pricing? Thank you.
32m 19s
Thank you very much, Farooq. The first question, I would say, both for Marco and Giulio feel free to answer both. Cristiano, the discounting question is for you. While the third one is for Giulio. [indiscernible] hi Farooq. Thanks for all the the question. I would say, I think that the most of our of our focus on the our traditional business. So we know that we everywhere we are mainly retail and SME group, mainly focused on like non motor in Europe. And therefore, you should think our focus in enlarging product density in a way in our customer base on these traditional type of products. So we are talking about our the protection for the family, the protection for the house, the protection for the small businesses, so this kind of thing. Now on top of this, you remember in Venice we discussed some pocket of growth where we want to really be focused. We discuss our focus on health. We discuss our focus on protecting the development of climate in the medium term. We discussed the focus on making sure that the SME have completely understood the risks that they have on cyber. So I think overall, we are capturing the this type of niches that are growing Maybe health is not a niche because it's already very big, but it's still developing.
33m 56s
But you should think our main business has developing on our core capability And just to give you an idea, our non motor is still developing at a much better combined ratio. And I always have in mind attritional undiscounted without nat cat So it's running at a better combined ratio than motor, clearly about 62% and our motor is still on the 70%, so range So this is the type of the type of product we are focusing on.
34m 33s
Yeah. Maybe I pick up the question about the outlook for retail. So I will say the following. As I was saying before for 2025, we still expect the annual premium to be ahead of the risk premium and this is in motor. In non motor, it's more or less a match. I would expect that as we go into 2026, most likely the earned premium and the risk premium are going to be in line. So from that point of view, in general, on the portfolio, we'd expect that we are going to add this kind of situation. In some areas, we are still going to be able to get rate increases which are ahead of the risk premium that is in the portfolio like Spain where we need to get some additional traction. What I would like anyway to highlight, if you take the numbers that we have right now for the quarter, you basically normalize our combined ratio for Nat Cat. The combined ratio that we have in first quarter is 94.2 So let's say it's 94.5% for the sake of argument. This combined ratio is in my opinion the right level with quality. At which we are running right now and then think about the can be still some improvement coming 2025 and then we go into 2026, 2027, the improvement will not come mostly from pricing, but will come from the productivity.
35m 55s
That we want to put in place and also from the cost containment ratio. So we are starting already from a level which is 94.5 And because of the pricing this year and because of other levers, we have still some room to go. And you remember that our target for '27 was of a combined ratio and discount to 94.5%. So from that point view, I will say that we had a very good start and we feel very well positioned to deliver on our 2020 or even over deliver on our 2027 ambition.
36m 31s
Hi, Farooq. To complete on the discounting effect, I would like to say that I agree first of all with you that the start of the year is bringing a slightly higher discounting. So if we just measure not in percentage, but if we go on the range due to the production and the amount of rates, I was telling you last time we were in the €550 600,000,000 I would say that we are in the €600,000,000 plus range now with the actual rates as of today.
37m 5s
That's excellent. Very bullish. Thank you very much.
37m 9s
Thank you, Farooq. Next question please.
37m 11s
Next question is from Stephen Haywood, HSBC. Please go ahead.
37m 19s
Just three, hopefully, quick questions for you.
37m 22s
First one, on the asset management business, Did you have any performance fees coming in the asset management business in the first quarter? I saw there was a lot for Bank of Generali, but I just want to clarify for me. Asset management business. Secondly, don't know if I missed this in your introduction, but you have any full year guidance for the investment result of the non life business.
37m 48s
And then thirdly, you mentioned, obviously, surrender is not at a normal level. In Italy yet. Are you expecting any potential variances or assumption changes to come later in the year for this?
38m 4s
Thank you very much, Steven. I would say all the three questions are for Cristiano.
38m 9s
Hello, Steven. So first quarter only on the asset management excluding the €34,000,000 of performance fees of Banca Generali, posted €2,000,000 of performance fees in the asset management segment. The structure of the performance fees of the asset management is very different from the one of Banca Gennali Wealth. So it is totally skewed in the last part of the year where the vast majority comes in the fourth quarter just for you be aware of. This is performance fees. Other form of non regular fees like transaction fees can derive quarter to quarter according to the interaction. But the most, let's say, volatile are the performance ones which are skewed in the fourth. So the second question related to the investment result guidance for the year, yes, as I was saying in the introductory speech, we confirm €950,000,000 with environment and interest rates, it is confirmed. Third question surrenders in Italy. We have experienced as Marco was saying, a reduction of surrender in amount by 20%, which is in line from what now has been put in our CSM as well as in our new business value hypothesis, which were accordingly changed at the same logic of the CSM stock, which means that there are no deviation from what we have [indiscernible] and budgeted.
39m 57s
Excellent. Thank you very much. Good luck.
39m 59s
Thanks to you, Stephen. Next question, please.
40m 2s
The next question is from Fahad Chungazioni, Kepler Cheuvreux. Please go ahead.
40m 9s
Hello. Thank you for taking my questions. Just very quick follow ups.
40m 13s
So regarding the new business margin guidance for the subsequent quarters of 5.25% to 5.75%.
40m 22s
If [indiscernible] improve further, presumably, will sort of make us go to higher end of the range? And could you also comment on what's happening with your commercial incentives in Italy and how we should think about that as we go through through the year? And another question. Please, is on the Netexas JV. Can you give any detail on the process and timeline of the Italian government's review? Thank you.
40m 56s
Thank you very much, Fahad. In The first question on the new business margin is for and in commercial incentive is for Marco. While at this stage, are no updates that we give regarding Atexus JV.
41m 12s
So let me maybe build on the topic of lapses and guidance. On new business margin. So as I said at the beginning, lapses are going down, not at the level like let's say 2020, but there are like business reasons this. So first, the interest rate environment is completely different. And therefore, this has an impact on the type of lapses that we see. But second also, the more we go on, the more the type of business we are selling matters because we have a much more hybrid much more hybrid stock of assets under management that we sold in the past. Therefore, we do see that this has naturally a little bit more lapse even because the type of product is a whole life. So in the end, it needs to have this kind of trend. So we don't expect that this is going back to like 2020 number, but I would say the trend that we see is completely in line with what we expected during the year. So I think we can confirm the guidance that we give in 5.25%, 5.75 And the other topic was on commercial incentive, right? So commercial incentive, we are as much as we are normalizing the situation we are scaling back.
42m 47s
Commercial incentive and we are focusing a little bit more on quality volume coming in so this is type of movement that we that we see in the Italian business at the moment.
43m 4s
Okay. That's great. Thank you.
43m 5s
Thank you, Fahad. Next question please.
43m 8s
Next question is from William Hawkins, KBW. Please go ahead.
43m 14s
Morning all.
43m 15s
Sorry, I've got three. I hope they're quick.
43m 17s
Can you just help me understand a bit more the walk towards the £950,000,000 non life investment income guidance, please? I'd be keen to know the Argentinian impact on the February figures. But more importantly, if I just take 164 and multiply it by four, that's €650,000,000 which is 300,000,000 short the guidance you're giving. So if you could help me understand how we accelerate to the end of the year, please?
43m 40s
Secondly, on the PVN BP that declined to CHF17.3 billion this quarter, if we exclude China and France, what was the growth rate in that number, please? And can we assume that, that growth rate continues for the rest of the year? And then lastly, sorry if I'm being a nerd, but the balancing item between in Life, the balancing item between the CSM release and the insurance service result seemed unusually positive this quarter. My assumption is that all the other things like risk adjustment loss component and the rest of it nets out to zero as a normal assumption. Is that correct? And if it's not correct, can you just tell me how positive or negative is all the other stuff? Because it felt to me like it was unusually positive this quarter. Thank you.
44m 22s
Thank you very much, William. All the three questions are for Cristiano. So I start with the third one which is easiest and it is concentrated in the simple fact that we had a reverse of loss component because of the higher interest rate environment. Which was accounting for €47,000,000 And then we have positive experience variance mainly related to the PAA business in our French activities of something of the order of €29,000,000 These are the driver which were bringing the support. The decline of PVNBP if we exclude China the China impact out of that would have been something like plus 5% number.
45m 29s
I would say, doing it by heart. So the work from the $9.59 €50,000,000 In the first quarter, we posted in the P and C investment result something of the order of one hundred and sixty four million euros Don't forget that this is the joint effect of operating investment income and finance expenses. So excluding our Argentina, this number would have been broadly broadly the same because the effect on the investment result and the finance expenses would have gone down. So to have a clean run rate, you should take the €326,000,000 operating investment income without Argentina, multiply it times four, add €100,000,000 of the operating investment income that we are expecting from Argentina, [indiscernible] add the €150,000,000 dividend distributions sub subtracting €600,000,000 of IFS. So if you do that, Matt is not wrong to bring me to the $950,000,000 guidance.
46m 53s
That's fantastic. Thank you very much.
46m 55s
Thanks to you, William. Next question, please.
47m 4s
The next question is is a follow-up from Michael Hauser, Berenberg. Please go ahead.
47m 9s
I just think I forgot my way. I like asking about cash. Can you so I was just looking at your presentation over CHF11 billion is the target for the three year plan. The cumulative net holding cash flow. I just wondered if you can give us a feel for where we are relative to the plan and also what kind of sort of level of one offs I know you've talked about it in Venice, but and and also the full year, but it'd be a reminder, would be lovely. Thank you.
47m 38s
Yes, William. So we are exactly in line with the plan especially because when we presented the 2025 end of January 2025, the strategic plan twenty five-twenty seven, the decision on the remittance for 2025 was taken. So there was much less uncertainty. I would expect potentially some positive second order effect on the year coming from better than project result, which will come. That's why I'm saying that we are above 95%, but not at 100% in some small pieces. So Saying and projecting further, what pleased me in the results I've seen today and I think in all what Marco and Giulio are telling you from the underlying business, is that these results even in the Life component you've seen, they are more and more driven by cash component elements. Because if you just take the P and C, the discounting cancels out with the unwinding of the EC. And you are really posting an improvement which is fully driven by cash elements. So this is a very solid mix to bring you a more than €11,000,000,000 net holding cash flow cumulated.
49m 2s
Fantastic. Thank you very much.
49m 9s
Gentlemen, there are no more questions ready registered at this time. I turn the conference back to you for any closing remarks.
49m 16s
Thank you, operator. This concludes our first quarter twenty twenty five results call. Thanks everyone for dialing in and of course the IR team remains at your full disposal for any follow-up. Enjoy the rest of your day. Goodbye. [indiscernible] and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.
Key Insights
Generali Group reported strong Q1 2025 results, marking a solid start to the "Lifetime Partner 27 Driving Excellence" plan, with P&C top-line growth of 8.6% (mainly pricing-driven) and a reported combined ratio below 90; the company targets an undiscounted combined ratio of around 94.5% by 2027.
Life segment net inflows reached €3 billion in Q1, with €1.4 billion in Protection & Health and €1.2 billion in Hybrid/Unit Linked; new business margin guidance for upcoming quarters is 5.25%–5.75%, and surrenders in Italy are down 20% YoY, trending as expected.
P&C operating insurance service result grew over 25% YoY, with strong margin expansion and top-line growth; man-made losses were €35 million (down from €54 million YoY), and the company expects a non-discounted combined ratio potentially below 95% for 2025, subject to nat cat volatility.
Investment income guidance for 2025 is confirmed at €950 million for P&C and €900 million for Life; Q1 P&C investment result was impacted by Argentina but expected to improve through the year, and capital generation remains robust with a Solvency II ratio at 210%.
The group is on track with its €11 billion cumulative net holding cash flow target for the 2025–2027 plan, with over 95% of planned remittances for 2025 already received; adjusted EPS grew 9.4% YoY, and management reiterated a focus on value creation, disciplined underwriting, and productivity improvements.
