Earned premiums and net deposits

Gross written premiums

Written premiums in the life segment, including premiums related to investment contracts, amounted to € 45,115 million, stable with respect to the previous year (+0.2% on equivalent terms). This trend was driven by the rise in linked contracts (+8.8% on equivalent terms), in line with the strategy aimed at favouring lower capital-absorption products. In decline the trend in the savings and pension lines (-2.6% on equivalent terms) and, to a lesser extent, the protection policies (-0.4% on equivalent terms).

Group written premiums by line of business

 

Net cash inflows amounted to € 8,702 million, far higher than the figure reported at 31 December 2012, owing to the significant containment of capital outflows, particularly surrenders and maturities, and the above mentioned slightly positive performance in terms of written premiums.

New business annual premium equivalent (APE) amounted to € 4,470 million, decreasing slightly compared to the previous year (-1.0% at constant exchange rates and share attributable to the Group). The new business production in 2013 is characterized by a modest decrease in annual premiums (-1.9% on equivalent terms), that continue to have a predominant weight on the total APE (almost 61% of APE) and the moderate development of single premiums (+0.4% on equivalent terms), driven by the significant increase recorded in Italy (+19.1% on equivalent terms) and Germany (+19.4% on equivalent terms). With reference to the lines of business, savings and pension lines declined (-4.1% on equivalent terms), while both protection and linked business grew (on equivalent terms, respectively, +3.6% and +8.4%).

Despite the drop in interest rates, the profitability of new business (margin on APE) has increased from 19.2% in 2012 to 21.0% in 2013 with the increase explained by a better product mix and the constant reduction in the level of guarantees offered. Due to improved profitability, the value of new business (NBV) recorded a significant increase compared to 2012 (+14.2%) and amounted to € 937 million.

Gross direct premiums by line of business and by geographical area
 Savings and
Pension
ProtectionUnit/index linkedTotal
(€ million)31.12.201331.12.201231.12.201331.12.201231.12.201331.12.201231.12.201331.12.2012
Italy 12,543 11,590 200 220 569 515 13,312 12,324
France 4,458 6,564 1,582 1,745 1,225 912 7,266 9,221
Germany 7,488 6,909 4,144 4,103 3,357 3,298 14,989 14,309
Central and Eastern Europe 851 981 245 233 471 428 1,568 1,642
EMEA 2,057 2,280 833 806 2,789 2,639 5,679 5,725
Spain 807 988 186 185 12 9 1,005 1,183
Austria 639 627 259 248 239 252 1,137 1,127
Switzerland 169 189 134 134 760 834 1,062 1,157
Other EMEA 442 476 254 239 1,778 1,544 2,474 2,259
Latin America 203 190 230 250 0 0 433 440
Asia 616 521 203 174 83 50 902 744
International  Operations 69 92 19 20 0 0 88 112
Total direct written premiums 28,285 29,127 7,457 7,550 8,495 7,841 44,237 44,518

The table above shows the major importance of savings and protection contracts (63.9% of the total), while the unit/index linked portfolio accounts for 19.2% of the total gross direct written premiums. Concerning the health business, the Group has a strong presence in markets such as Germany and Austria where operate companies dedicated to this segment; while in all the other geographical areas health premiums refers to life insurance rider covers.

With reference to the distribution by geographical area, the Group, in the life and health market, is present in various countries with a relative stability in terms of written premiums. However it is worth noting that around 96% of the total written life and health premiums refers to the European market.

A geographical focus follows regarding the main indicators set out above:

Italy

ItalyGross written premiums in Italy increased from € 12,324 million al 31 December 2012 to € 13,312 million. This performance (+8.0%) was attributable to the increase +11% of written individual premiums driven by the increase in single premiums (+24.2%), benefiting from competitive returns compared to alternative products; written recurring premiums were stable. All distribution channels contributed to the growth in written individual premiums, in particular the traditional channel showed an increase of +8.9% and also the financial advisor channel +8.5%, which evidenced a significant recovery from the first half of the year. A positive contribution was evidenced from the banking channel that doubled its collection.

New business annual premium equivalent increased (+12.7% on equivalent terms) due to the positive development of both the annual premium (+9.4% on equivalent terms), which represents almost 65% of APE, and single premium products (+19.1% on equivalent terms).
The profitability (margin on APE) increased from 17.2% in 2012 to 18.2% in 2013, the growth, observed in all major business lines, is explained by the more favourable tariffs in the savings and pension lines and the positive effect of lower interest rates on the profitability of protection products. As a result of higher volumes and improved profitability the value of new business increased by 21.0% and amounted to € 336 million.

Net cash inflows improved significantly, benefiting from the significant decline in maturing contracts, in addition to the above mentioned premium performance; it should be noted that the fourth quarter evidenced a significant net increase due to the banking channel.

France

FranceGross written premiums in France went from € 9,465 million at 31 December 2012 to € 7,671 million. This decrease (-19.0%) was attributable to the protective measures adopted for the savings and pension portfolio last year due to the significant outflows which affected this portfolio in the first quarter of 2012. With reference to the lines of business, the sharp growth in written premiums of linked policies (+34.3%), particularly single premium policies, reflect the actions taken to improve the portfolio mix towards products with lower capital absorption, and benefit from the more confident climate in the financial markets. This increase, was fully offset by the downtrend of protection policies (-9.3%) and the decrease in savings and pension policies (-32.1%) as a result of the aforementioned measures.

The sharp contraction of APE (-20.3% on equivalent terms) was mainly explained by the fact that the production of the first part of 2012 benefited from the effects of an extraordinary operation in order to preserve the traditional portfolio of savings single premiums. Neutralizing this impact, the production evidences a slight decrease. The more profitable protection business and linked business grew (+21.9% on equivalent terms and +22.5% on equivalent terms respectively).

As a result of lower volumes, the value of new business decreased by -20.6% and amounted to € 96 million, while profitability (margin on APE) remained stable at 12.7% due to a more favorable business mix (greater weight of the more profitable protection and linked products) which compensated for the negative effect due to the fall in interest rates.

Although still negative, net cash inflows rose sharply, thanks to a reduction in capital outflows, which offset the abovementioned decline of written premiums.

Germany

GermanyGross written premiums in Germany performed exceptionally well, increasing from € 14,310 million at 31 December 2012 to € 14,989 million, confirming the country to be the first premiums contributor of the Group. The growth (+4.7%) was mainly attributable to the performance of the savings and pension policies (+8.4%), solely single premium policies. An increase was reported also for the protection business (+1.0%), also due to the performance of single premium policies, and the linked business (+1.8%).

New business annual premium equivalent grew moderately (+0.8% on equivalent terms). Single premiums evidenced a significant development (+19.4% on equivalent terms) maintaining the levels observed during the second half of 2012, while annual premiums declined both in the life business (-10.0% on equivalent terms) and in the protection business (-2.5% on equivalent terms).

The profitability (margin on APE) increased from 20.2% in 2012 to 26.5% in 2013 due to higher margin from the protection business and the more profitable tariff characteristics of the new single-premium products. As a result of higher volumes and improved profitability the value of new business increased by 31.6% and amounted to € 248 million.

Net cash inflows remained at excellent levels, even though decreasing compared to the previous year due to the increase in capital outflows which offset the positive performance of premiums written.

Central and Eastern Europe

Central and Eastern EuropeGross written premiums of Central and Eastern Europe decreased from € 1,642 million at 31 December 2012 to € 1,568 million, (-2.1% on equivalent terms). In detail, while linked policies increased (+12.0% on equivalent terms) especially in Poland, and protection policies grew (+7.9% on equivalent terms) as a result of the performance in the Czech Republic, Slovakia and Poland, savings and pension policies decreased (-10.7% on equivalent terms) particularly in Poland and the Czech Republic.

The decline in the value of new business (-23.7% on equivalent terms) is mainly due to the volatile developments in the pension funds in the Czech Republic and Poland, which have been affected by recent regulatory changes and uncertainties. By neutralizing these impacts the change in new business in the EEC is positive at +6.3% on equivalent terms.

The profitability (margin on APE) increased from 31.4% in 2012 to 38.5% in 2013 due to the increased profitability of the new pension products marketed in the Czech Republic. Despite increased profitability, lower volumes caused a decline in the value of new business of 8.9% to € 73 million.

Net cash inflows increased compared to 31 December 2012, due to the considerable growth witnessed in the Czech Republic owing to the diminished outflows from pension funds as a consequence of the restrictions imposed by the pension reform; significant improvements were also recorded in Poland and Hungary.

EMEA

EMEAGross written premiums in EMEA decreased (-0.5% on equivalent terms) from € 5,751 million at 31 December 2012 to € 5,703 million. The trend is determined by the contraction of the savings policies, partially offset by the positive performance of both linked policies and protection lines.

In particular, a reduction in gross written premiums in Spain, which amounted to € 1,006 million (€ 1,183 million at 31 December 2012); this decrease (-15.0%) was attributable to the decline in collection of savings policies (-18.3%), due to the renewal of a single premium policy occurred in the last quarter of the previous year. Protection policies remain stable (+0.2%); instead, linked policies performed well.

In Austria gross written premiums amounted to € 1,156 million (€ 1,147 million at 31 December 2012); this increase (+0.8%) was due to the protection lines (+4.5%), which recorded an increase in both the number of policies and the average premium, and from savings and pension policies (+1.9%); the trend of the lines of business mentioned above mitigate the contraction of linked policies (-5.0%), which are affected by the continued difficult market conditions.

Gross written premiums in Switzerland (-6.3% on equivalent terms), decreased from € 1,157 million at 31 December 2012 to € 1,062 million. The decline was mainly due to savings and pension products (-9.0% on equivalent terms), solely single premium policies whose distribution is hindered by low interest rates. Linked policies also decreased (-7.0% on equivalent terms), both annual and single premiums, whereas protection policies performed well (+2.2% on equivalent terms).
The above-mentioned increase in EMEA countries was attributable to the contribution of Ireland, which showed a positive trend in all lines of operations, specifically linked policies (+28.0%).

New business annual premium equivalent decreased slightly (-3.6% on equivalent terms), a consequence of the contraction observed in the saving business lines of (-15.4% on equivalent terms), partially offset by the positive progress of linked business (+6.2% on equivalent terms), while the protection business remained essentially stable (+0.1% on equivalent terms). In terms of geographical territory, business is declining in Austria (-3.8% on equivalent terms), Switzerland (-30.5% on equivalent terms) and the Guernsey (+7.3% on equivalent terms) while Spain increases (+4.7% on equivalent terms) and Ireland (+36.8% on equivalent terms).

The better product mix contributed positively on profitability (margin on APE) which passes from 20.8% in 2012 to 26.1% in 2013. The new business value amounted to € 156 million, an increase of 21.7%.

Net cash inflows in EMEA increased due to the significant decrease in maturing contracts that compensate for the negative trend in premiums. This trend is mainly attributable to Spain, where at 31 December 2012 showed high values for maturing contracts, and also in Ireland. Growth trends are evident in Austria, Portugal, Belgium and the Netherlands, which offset the downtrends observed in Switzerland and Guernsey.

LATAM

LATAMGross written premiums in Latin America increased (+17.0% on equivalent terms) to € 434 million (€ 447 million at 31 December 2012).

The trend is due to both the growth in savings and pension policies (+29.2% on equivalent terms), and protection policies (+10.7% on equivalent terms) especially in Argentina, which was also influenced by inflationary increases.

Finally, the growth in net cash inflows in Latin America due to the excellent performance of Argentina, which benefits from the aforementioned inflationary effects, and Brazil.

 

Asia

AsiaOptimanl performance in gross written premiums in Asia increasing from € 745 million at 31 December 2012 to € 902 million (+24.2% on equivalent terms).
This growth is attributable to gross written premiums in all lines of business, with particular reference to savings and pension policies (+19.5% on equivalent terms).
At country level, it can be noted that the positive trend is attributable to China as well as in emerging countries, such as Indonesia and the Philippines.

Finally, the growth in net cash inflows in Asia is mainly due to the excellent performance of the above mentioned China, Indonesia and the Philippines.

With reference to Asia and Latin America, the value of new business APE shows good growth (+10.1% on equivalent terms) as a result of the strong increase recorded in Asia (+17.3% on equivalent terms), partially offset by a decline in South American countries (-26.2% on equivalent terms). The value of new business decreased slightly (-1.9% on equivalent terms) and amounted to € 28 million.

International operations

Gross written premiums in the International Operations Group, increased from € 514 million at 31 December 2012 to
€ 537 million (+6.6% on equivalent terms), due to the favorable Generali Employee Benefits business.

Finally, net cash inflows of the International Operations group increased due to the above-mentioned positive trend in premiums.

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Life inflows and technical reserves175.47 KB
Life new business analysis173.97 KB
Assicurazioni Generali S.p.A. - C.F. e P.IVA 00079760328