Note on Management Report

The Generali Group’s consolidated financial statements at 31 December 2013 were prepared taking into account the IAS/
IFRS issued by the IASB and endorsed by the European Union, in accordance with the Regulation (EC) No. 1606/2002, Legislative Decree No. 58/1998 and Legislative Decree No. 209/2005, as amended by Legislative Decree No. 32/2007.

In this yearly report the Generali Group prepared its consolidated financial statements and Notes in accordance with the ISVAP Regulation (now IVASS) No. 7 of 13 July 2007 and subsequent modifications and the information of the CONSOB Communication No. 6064293 of 28 July 2006. As allowed by the aforementioned Regulation, the Generali Group believed it appropriate to supplement its consolidated financial statements with detailed items and to provide further details in the Notes in order to meet also the IAS/IFRS requirements.

The Group takes advantage of the option provided for by Regolamento Emittenti, art. 70, paragraph 8, and art. 71, paragraph 1-bis, to waive the obligation to publish the information documents prescribed in relation to significant operations of merger, split, capital increase by contribution in assets, acquisitions and disposals.

The Group at 31 December 2013 consists of 480 consolidated line by line subsidiaries and valued at equity entities (498 at 31 December 2012). In particular, entities consolidated line by line went from 451 to 432, and those valued at equity remained 47.

This report was drawn up in euro (the functional currency used by the entity that prepared the consolidated financial statements) and the amounts are shown in millions, rounded to the first digit, unless otherwise stated, the rounded amounts may not add up to the rounded total in all cases.

With effect from 1 November, the Generali Group completed a territorial simplification into seven geographic areas based on the areas of responsibility of the Group’s country managers, which will allow for greater coordination among the regional markets and the Head Office. The new structure consists of the business units of the three main markets - Italy, France and Germany - and four regional structures:

  • CEE: Central and Eastern European countries inside the EU;
  • EMEA: Austria, Belgium, Greece, Guernsey, Ireland, Netherlands, Portugal, Spain, Switzerland, Tunisia, Turkey and Dubai;
  • LatAm: Argentina, Brazil, Colombia, Ecuador, Guatemalaand Panama;
  • Asia: China, Indonesia, India, Hong Kong, Vietnam,Thailand, the Philippines and Japan.

Inaddition to these areas, the cluster International Operations was introduced, which includes the activities of Holding, the reinsurance of the Group, the business relating to Europ Assistance and BSI, the international activities of the Parent
Company not allocated in the previous geographical areas and investment management activities and real estate management activities for Group companies.

The reporting by geographical area presented in this report has been adapted to the new territorial structure of the Group.

In June the Group reached an agreement - finalized on 1st October 2013 - for the sale of the reinsurance business of the
life segment in U.S.A. The agreement foresees the sale of 100% of Generali U.S. Holdings and its subsidiaries and the withdrawal of the business currently retroceded to Assicurazioni Generali.
Always in June, Generali Group has reached an agreement with the Group Financiero Banorte for the sale of minority interests of 49% in Mexican companies Seguros Banorte Generali and Pensiones Banorte Generali. The operation was completed on 4th October 2013.

On 20 November 2013, the Generali Group has entered into an agreement for the sale of 100% of Fata Assicurazioni Danni
S.p.A. Pending the release of the necessary regulatory approvals in accordance with IFRS 5, as of 31 December, 2013 Fata
Assicurazioni Danni S.p.A was classified in the balance sheet as a discontinued operations held for sale. Consequently, the
participation have not been excluded from consolidation but both total assets and liabilities have been recorded as noncurrent assets and liabilities of disposal group classified as held for sale and the profit or loss, net of tax effects, was recognized as a separate line in the consolidated income statement in the item profit or loss from discontinued operations.

A description of the alternative performance indicators presented in this report can be found in the Methodological note on alternative performance indicators.

With reference to the concept of materiality expressed in the International <IR> Framework, the process for determining
materiality employed by General takes into account the primary purpose of the integrated report, which is to explain to providers of financial capital how the organization creates value over time.
General believes that value is created by focusing on the following primary stakeholders: the financial community, clients, human resources and distribution channels. Therefore, the issues which could substantively affect the organization’s ability to create value over time are linked to these four stakeholder groups.
In order to define material issues, the company relied on strategic management control tools, such as the strategic plan and the QBR (quarterly business review). In the future, Generali will continue to strengthen its actions related to stakeholders engagement; thereby a greater alignment to the materiality determination process proposed by the IIRC will be implemented.

The Annual Integrated Report is supported by a structured information system, which processes both financial and non-financial information. This allows the company to increase the homogeneity and reliability of both kinds of information.

With regard to the scope of reporting of the Annual Integrated Report, the performance indicators related to human resources refer to the entire Group.

Changes in the presentation of the performance indicators of the Group

All the economic indicators and comparative performance included in this management report have been restated in line with
the current scope of consolidation.

It should be noted, therefore, that the changes indicated in the management report are on a comparable basis, excluding from the comparison period, discontinued operations with reference to 31.12.2013.

As mentioned above, the comparative KPIs contained in this report have been restated as follows:

 31.12.2012  as
previously published
change
in scope
31.12.2012 as published
Gross written premiums 69,613 -3,119 66,494
Life gross written premiums 46,810 -1,612 45,198
Property and Casuality gross written premiums 22,803 -1,507 21,296
Net cash inflows 3,542 -444 3,097
Combined ratio 95,7% 0,1% 95,8%
operating result 4,219 -225 3,994
Life 2,658 -123 2,535
Property and Casuality 1,664 -103 1,561
Financial 408 0 408
Holdings and consolidation adj -510 0 -510
Non operating result -2,496 55 -2,441
Investments 338,817 -4,784 334,033

As of this report, the data relating to the Group’s combined ratio indicated above and the technical result of the property&casualty segment, have also been restated by reclassifying the interest component of the financial reserves for annuities from claims expenses to the financial result. The comparative figures have been restated as follows.

 Figures before
the change in
presentation 31.12.2012
Effect of change
in presentation 31.12.2012
Figures
published 31.12.2012
Technical result 802 9 811
of which net insurance claims -13,595 9 -13,586
Financial result 1,029 -9 1,020
Combined ratio 95.9% -0.05% 95.8%
Loss ratio 68.8% -0.05% 68.7%
Expense ratio 27.1% 0.00% 27.1%
Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328