UnipolSai, Italy’s second-largest insurer, confirmed its full-year targets on Friday after a 37.7% rise in nine-month earnings, despite an uncertain economic outlook caused by the resurgence of the COVID-19 pandemic.
The company said its consolidated net profit for the first nine months of the year reached 701 million euros ($828 million) from 509 million euros a year earlier, lifted by earnings in its property and casualty business, its highest revenue earner.
Third quarter results were in line with analyst expectations.
“The performance to date and information currently available allow us to confirm that the income from operating activities for the current year is in line with the targets set in the 2019-2021 industrial plan,” UnipolSai said in a statement.
Under the plan, the insurer is targeting a cumulative net profit of 2 billion euros.
Insurance premiums fell 13.7% to 8.6 billion euros, dragged down by a 27.2% drop in life business revenues mainly due to more limited commercial activity. Non-life insurance revenues were down 3.6%.
Motor claims picked up in the third quarter versus the previous quarter as car traffic recovered after coronavirus restrictions were lifted.
UnipolSai’s combined ratio, a measure of profitability for its property and casualty division, was 86% in the period, improving from 94.1% a year earlier, but worsening from 82.1% at the end of the first half. Readings below 100% indicate profitability.
The solvency ratio, a key measure of financial strength, improved to 284% from 272% at the end of first half and in line with the previous year.
UnipolSai further cut its domestic government bond holdings to 42.9% of its overall financial portfolio from 50.1% in 2019 to shield its capital reserves.
European insurers are required to book investments in sovereign holdings at market value in order to calculate capital and solvency ratios.
($1 = 0.8470 euros) (Reporting by Andrea Mandalà; editing by Giulia Segreti and Mark Potter )
Topics Profit Loss COVID-19
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