Generali Keeps 2024 Goal as Profits Rise 30% Despite Disaster Claims

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Italy’s top insurer Generali stuck to 2024 targets on Thursday after posting a 29.6% rise in nine-month adjusted net profit despite rising claims from natural disasters which it said would also weigh on this quarter.

The impact of extreme weather on Italy’s fragile topography has been posing a growing challenge to insurers there.

Floods and hailstorms in Italy, Greece and central eastern European countries inflicted a 3.7-percentage point hit to Generali’s combined ratio in the nine months through September.

This measure of profitability for the property and casualty division – which also tracks capital strength and stands below 100 when claims and any related expenses borne by an insurer lag the premiums it earns – came in below expectations.

Generali’s combined ratio stood at 94.3% at the end of September, improving from 97.4% a year earlier. But excluding a discounting effect from claim reserves, the ratio stood at 97.9%, worse than analysts’ consensus forecast of 97.4%.

Generali shares were down 1.5% at 0951 GMT, bucking a 0.7% rise in Italy’s blue-chip index .FTMIB and a similar gain in the European sector .SXIP.

“Premiums and profits are running marginally ahead of consensus, and remain on track to exceed targets,” Jefferies said, adding the solvency ratio was disappointing and the undiscounted combined ratio also “worse than expected.”

Generali forecast a loss of 50-100 million euros ($54-109 million) from October-November storms in Italy and France, finance chief Cristiano Borean told a post-results briefing.

Gross premiums rose 4.7% to 60.5 billion euros in the nine months, driven by strong growth in the non-life business (up 11.4%), while the life segment proved resilient.

Nine-month adjusted net profit came in at 2.98 billion euros, while operating profit, a figure closely watched by the market, rose 16.7% to 5.1 billion euros. Both figures were broadly in line with market expectations.

“Generali remains fully on track to successfully achieve all the targets” of its 2024 strategic plan, Borean said.

Its solvency ratio, which measures the company’s financial strength, was 224% at the end of September, below analysts’ consensus forecast of 227%. It stood at 222% at the end of last month due to a negative market trend, Borean said.

($1 = 0.9217 euros)

(Reporting by Gianluca Semeraro; editing by Federico Maccioni and Mark Potter)