Generali’s first half net profit dropped by 56.7% to €774 million ($909.8 million), compared with €1.8 billion (US$2.1 billion) reported for the same period in 2019.
The combined ratio improved to 89.5% (91.8% in H1 2019), driven by the improvement in the non-catastrophe current year loss ratio recorded in the insurer’s motor business in all major countries in which its operates, and also related to the impact of lockdown restrictions which changed customer behaviors. (A combined ratio below 100% indicates the company is making an underwriting profit).
The company’s net operating result for the half was €2.71 billion (US$3.19 billion), compared with €2.72 billion ($3.2 billion) for the first six months of 2019.
Generali estimated that its operating result was negatively affected by approximately €84 million ($98.7 million) as result of the COVID-19 pandemic.
The company’s Life business was negatively affected by a total of €225 million ($264.4 million), largely due to the lower investment net result, relating to the negative performance of global financial markets. However, the insurer estimated that the P&C business was positively impacted by €87 million ($102.3 million). The higher number of pandemic related claims and lower current income “were more than offset by the fewer claims registered in the first six months of the year as result of the lockdown in the main countries where the group operates,” Generali explained.
Further, the company estimated that its operating result was positively impacted by a reduction of costs following the various initiatives put in place by the group in response to the COVID-19 crisis. Some of these initiatives include the new way of working, in order to ensure the safety of the group’s employees, through the extension of smart working that led to cost savings (e.g., travel expenses and event expenses).
During the first half, total gross written premiums reached €36.5 billion ($42.9 billion), which is up by 1.2% from 35.7 billion, reported in H1 2019. Generali attributed this improvement to the positive performance of the Life (+1.3%) and P&C (+0.9%) businesses.
The solvency ratio continued to be solid at 194%, down 2 percentage points from Q1 2020.
Topics Profit Loss COVID-19
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