Investment contracts without DPF and that do not have a significant investment risk, mainly include unit/ index-linked policies and pure capitalization contracts. These products are accounted for in accordance with IAS 39 as follows: – the products are recognised as financial liabilities at fair value or at amortised cost. In detail, linked products classified as investment contracts are fair valued through profit or loss, while pure capitalization policies are generally valued at amortised cost; – fee and commission income and expenses are recognised in the profit and loss account. Specifically, IAS 39 and IAS 18 require that they are separately identified and classified in the different components of: (i) origination, to be charged in the profit and loss account at the date of the issue of the product; and (ii) investment management service, to be recognised throughout the whole policy term by reference to the stage of completion of the service rendered; – fee and commission income and incremental costs of pure capitalization contracts without DPF (other than administration costs and other non-incremental costs) are included in the amortised cost measurement; – the risk component of linked products is unbundled, if possible, and accounted for as insurance contracts.
Liabilities related to insurance contracts and investment contracts with discretionary participation features are determined analytically for each kind of contract on the basis of appropriate actuarial assumptions. They meet all the existing commitments based on best estimates. These actuarial assumptions take into consideration the most recent demographic tables of each country where the risk is underwritten, aspects of mortality, morbidity, determination of risk-free rates, expenses and inflation. The tax charge is based on laws in force. Among life insurance provisions, provisions in addition to mathematical provisions, already envisaged by the local regulations in case of adverse changes in the interest rates or mortality, are classified as provisions for the liability adequacy test.
Our performance Risk Report riods, and the provision for unexpired risks, which provides for claims and expenses in excess of the related unearned premiums.
The provisions for outstanding claims are determined by a prudent assessment of damages, based on objective and prospective considerations of all predictable charges. Provisions are deemed adequate to cover payments of damages and the cost of settlement of claims related to accident occurred during the year but not yet reported. The non-life insurance provisions meet the requirements of the liability adequacy test according to IFRS 4. Amounts ceded to reinsurers from insurance provisions are determined in accordance with the criteria applied for the direct insurance and accepted reinsurance.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the income statement.
Provisions for risks and charges are provided only when it is deemed necessary to respond to an obligation (legal or implicit) arising from a past event and it is probable that an outflow of resources whose amount can be reliably estimated, as required by IAS 37.
Liabilities directly associated with noncurrent assets and disposal groups classified as held for sale
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
This item includes provisions for defined benefit plans, such as termination benefit liabilities and other long-term employee benefits (the Italian provision for trattamento di fine rapporto is excluded and classified as other payables). In compliance with IAS 19, these provisions are measured according to the project unit credit method. This method implies that the defined benefit liability is influenced by many variables, such as mortality, employee turnover, salary trends, expected inflation, expected rate of return on investments, etc. The liability recognised in the balance sheet represents the net present value of the defined benefit obligation less the fair value of plan assets (if any), adjusted for any actuarial gains and losses and any past service costs not amortised. The rate used to discount future cash flows is determined by reference to market yields on high-quality corporate bonds. The actuarial assumptions are periodically tested to confirm their consistency. The actuarial gains and losses arising from subsequent changes in variables used to make estimates are recognised shall be accounted for in other comprehensive income without any possibility of recycling to profit and loss. Deferred fee and commission income include acquisition loadings related to investment contracts without DPF, which are classified as financial liabilities at fair value through profit or loss, according to IAS 39. Acquisition loadings related to these products are accounted for in accordance with IFRS 15 treatment of the investment management service component during the product life. They are recognised by reference to the stage of completion of the service rendered. Therefore, the acquisition commissions have been reclassified in the balance sheet, as liabilities to be released to the profit and loss account during the life of the product.
The item includes gross earned premiums on insurance contracts and investment contracts with discretionary participation features, net of earned premiums ceded.
The item includes fee and commission income for financial services rendered by companies belonging to the financial segment and fee and commission income related to investment contracts.
Income from subsidiaries, associated companies and joint ventures The item comprises income from investments in subsidiaries, associated companies and joint ventures, which are accounted for in the corresponding asset item of the balance sheet and it is related to the Group share of result attributable to each associate or joint venture.
The item includes the amounts paid in respect of claims occurring during the period, maturities and surrenders, as well as the amounts of changes in insurance provisions that fall under IFRS 4 scope, net of recoveries and reinsurance. It also comprises changes in the provision for deferred policyholders’ liabilities with impact on the profit and loss account.
The item includes expenses from investments in subsidiaries, associated companies and joint ventures, which are accounted for in the corresponding asset item of the balance sheet and it is related to the Group share of result attributable to each associate or joint venture.
The item comprises expenses from land and buildings (investment properties) and from financial instruments
not at fair value through profit or loss. It includes: interest expense; expenses on land and buildings (investment properties), such as general property expenses and maintenance and repair expenses not recognised in the carrying amount of investment properties; realized losses from financial assets, financial liabilities and land and buildings (investment properties); depreciations and impairment of such investments.
The item includes income taxes for the period and for previous years, deferred taxes and tax losses carried back, as well as the tax benefit from tax losses. This item includes also the uncertainties in the accounting treatment of income taxes, as required by IFRIC 23.
The statement of comprehensive income was introduced by the revised IAS 1 issued in September 2007 by the IASB, approved by the EC Regulation No 1274/2008. The statement comprises items of income and expenses different from those included in profit or loss, recognised directly in equity other than those changes resulting from transactions with shareholders. In accordance with the ISVAP (now IVASS) Regulation n.7/2007 as subsequently amended, items of income and expenses are net of taxes as well as net of gains and losses on available for sale assets attributable to the policyholders according to the deferred policyholders’ liabilities calculation.
This section comprises changes of the closing balance of the previous financial year determined by the correction of errors or changes in accounting policies (IAS 8) and by the change in the values of the assets and liabilities deriving from the retrospective application of new or amended accounting principles.
This section comprises the distribution of ordinary or extraordinary dividends, decreases in capital and other reserves (for redemption of shares, equity instruments and distributable reserves, the purchase of own shares, for the reclassification of liabilities previously recognized in equity instruments and, in the consolidated financial statements, for changes in scope of consolidation) and the attribution of profit or loss recognized directly in equity and in other balance sheet items (i.e. gains or losses on cash flow hedging instruments allocated to the carrying amount of hedged instruments).
This section comprises the effects capita transaction of the subsidiaries, that do not result in the loss of control.
This section comprises the equity components and gains or losses directly recognized in equity at the end of the reporting period. The statement illustrates all changes net of taxes and gains and losses arising from the valuation of financial assets available for sale, attributable to policyholders and accounted for in the insurance liabilities.
IFRS 13 - Fair Value Measurement provides guidance on fair value measurement and requires disclosures about fair value measurements, including the classification of financial assets and liabilities in fair value hierarchy levels.
With reference to the investments, Generali Group measures financial assets and liabilities at fair value in the financial statements, or discloses the contrary in the notes. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). In particular, an orderly transaction takes place in the principal or most advantageous market at the measurement date under current market conditions.
As for measurement and disclosure, the fair value depends on the unit of account, depending on whether the asset or liability is a stand-alone asset or liability, a group
– Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (i.e. quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; market-corroborated inputs).
Single or multiple valuation techniques valuation technique will be appropriate. If multiple valuation techniques are used to measure fair value, the results shall be evaluated considering the reasonableness of the range of values indicated by those results. A fair value measurement is the point within that range that is most representative of fair value in the circumstances. Three widely used valuation techniques are: – market approach: uses prices and other relevant information generated by market transactions involving identical or comparable (i.e. similar) assets, liabilities or a group of assets and liabilities; – cost approach: reflects the amount that would be required currently to replace the service capacity of an asset; and
– income approach: converts future amounts to a single current (i.e. discounted) amount.
– Debt securities Generally, if available and if the market is defined as active, fair value is equal to the market price.
– Private equity funds and Hedge funds Generally, if available and if the market is defined as active, fair value is equal to the market price.
In the opposite case, the fair value of private equity funds and hedge funds is generally expressed as the net asset value at the balance sheet date, determined using periodical net asset value and audited financial statements provided by fund administrators, in case adjusted for the illiquidity of the same fund and consequently hierarchized according to the quality of the inputs used.If at the balance sheet date, such information is not available, the latest official net asset value is used. The fair value of these investments is also closely monitored by a team of professionals within the Group.
The main input used in the valuation include volatility, interest rates, yield curves, credit spreads, dividend estimates and exchange rates observed at frequent intervals.
The fair value is determined primarily on the basis of the income approach using discounting techniques. In particular, the fair value of debt instruments issued by the Group are valued using discounted cash flow models based on the current marginal rates of funding of the Group for similar types of loans, with maturities consistent with the maturity of the debt instruments subject to valuation.
The Group carries out hedging transactions accounted for using the hedge accounting technique. According to this accounting model the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized directly in an appropriate item of comprehensive income while the ineffective portion of the gains or loss on the hedging instrument is recognized in profit or loss. The amount accumulated in the other components of comprehensive income is reversed to profit and loss account in line with the economic changes of the hedged item. When the hedging instrument expires or is sold, or the hedge no longer meets the criteria for hedge accounting, the cumulative gain or loss on the hedging instruments, that remains recognized directly in the other components of other comprehensive income from the period when the hedge was effective, remains separately recognized in comprehensive income until the forecast transaction occurs. However, if the forecasted transaction is no longer expected to occur, any related cumulative gain or loss on the hedging instrument that remains recognized directly in the other components of comprehensive income from the period when the hedge was effective is immediately recognized in profit or loss. With reference to emissions of some subordinated liabilities, the Group has entered into hedging transactions of the interest rates volatility and exchange rate fluctuations GBP/EURO, which for accounting purposes is designated as hedging the volatility of cash flows (cash flow hedge) and accounted adopting the hedge accounting technique.
Further the Group set cash flow hedges on forecast refinancing operations of subordinated liabilities that are accounted for as hedge of forecast operations, that are highly probable and could affect profit or loss. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized directly in an appropriate item of comprehensive income. The ineffective portion of the gains or loss on the hedging instrument is recognized in profit or loss. If a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains or losses that were recognised in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment.
The recognition of impairment follows a complex analysis in order to conclude whether there are conditions to effectively recognize the loss. The level of detail and the detail with which testing is being undertaken varies depending on the relevance of the latent losses of each investment. A significant or prolonged decline in the fair value of an investment in an equity instrument below its average cost is considered as an objective evidence of impairment.
The prolonged decline in value of bonds and loans are evaluated as a result of specific analysis that involve the single issuances. If an investment has been impaired in previous periods, further fair value declines are automatically considered prolonged. If there is objective evidence of impairment the loss is measured as follows: – on financial assets at amortised cost, as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate; – on available for sale financial assets, as the difference between the cost and the fair value at the measurement date.
– insurance provisions for the life and non-life segment; – financial instruments measured at fair value classified in level 3 of the fair value hierarchy; – the analysis in order to identify durable impairments on intangible assets (e.g. goodwill) booked in in the balance sheet (impairment test); – deferred acquisition costs and value of business acquired; – other provisions – deferred and anticipated taxes; – defined benefit plan obligation; – share-base payments.
Estimates are periodically reviewed and are based on key management’s best knowledge of current facts and circumstances. However, due to the complexity and uncertainty affecting the abovementioned items, future events and actions, actual results ultimately may differ from those estimates, possibly significantly. Further information on the process used to determine assumptions affecting the abovementioned items and the main risk factors are included in the paragraphs on accounting principles and in the risk report.
When an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognised for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share..
The segment includes companies that may specialise in institutional or retail clients, rather than on Group insurance companies or on third-party customers, or on products such as real assets, high conviction strategies or more traditional solutions
This grouping is an heterogeneous pool of activities different form insurance and asset management and in particular it includes banking activities, expenses related to the management and coordination activities, Group business financing as well as other activities that the Group considers ancillary to the core insurance business. The holding expenses mainly include the holding and regional sub-holding expenses regarding coordination activities, the expenses related to parent company stock option and stock grant plans as well interest expenses on the Group financial debt.
According to IFRS 8, the disclosure regarding operating segments of the Group is consistent with the evidence reviewed periodically at the highest managerial level for the purpose of making operational decisions about resources to be allocated to the segments and assessment of results.
Assets, liabilities, income and expenses of each segment are presented in the tables below, prepared as defined by the ISVAP Regulation No. 7 of 13 July 2007 and subsequent amendments. Segment data derives from a separate consolidation of the amounts of subsidiaries and associated companies in each business segment, eliminating of the effects of transactions between companies belonging to the same segment and eliminating the carrying amount of the investments in subsidiaries of the same segment. The reporting and control process implemented by Generali Group implies that assets, liabilities, income and expenses of companies operating in different business segments are allocated to each segment through specific segment reporting. Intra-group balances between companies belonging to different business segments are accounted for in the consolidation adjustments column in order to reconcile segment information with consolidated information.
In this context, Generali Group adopts a business approach on segment reporting, characterized by the fact that some transactions between companies belonging to different segments are eliminated within each segment.
31/12/2019 31/12/2018 31/12/2019 31/12/2018 3 AMOUNTS CEDED TO REINSURERS FROM INSURANCE PROVISIONS 2,593 2,765 1,789 1,244 4.1 Land and buildings (investment properties) 3,967 3,964 7,398 7,301 4.2 Investments in subsidiaries, associated companies and joint ventures 2,577 2,008 6,483 5,447 4.5 Available for sale financial assets 26,047 25,340 277,748 247,702 4.6 Financial assets at fair value through profit or loss 1,645 956 93,787 78,187 1 SHAREHOLDERS' EQUITY
2.1 Net insurance benefits and claims -13,073 -12,768 -58,009 -39,264 2.1.1 Claims paid and change in insurance provisions -13,644 -13,403 -58,697 -39,837 2.2 Fee and commission expenses and expenses from financial service activities 2.3 Expenses from subsidiaries, associated companies and joint ventures -36 -10 -0 -3 2.4 Expenses from other financial instruments and land and buildings (investment properties)
In relation to the Group’s interests in subsidiaries, no significant restrictions exist on the Group’s ability to access or use its assets and settle its liabilities. For further details regarding restrictions on Group assets, please refer to paragraph Contingent liabilities, commitments, guarantees, pledged assets and collaterals in Additional information section.
DVAG is the leading sales network for financial services in Germany and has an exclusive distribution partnership with a company held by Generali Deutschland Group
Fund (SSF) portfolios adding up to approximately 60 billion of renmimbi (approximately € 8 billion)
As part of the commercial relationships in the German area with the distribution partner DVAG, we inform that the current controlling shareholder hold a put option exercisable in respect of Generali Group.
Carrying amount of interest in immaterial associates 146 234 163 155
As of 31 December 2019, Generali Group holds no interests in unconsolidated structured entities that expose the Group to the variability of returns arising from their performance. However, please find below the following case: – In 2016 Generali Group stipulated a contract with Horse Capital I, an Irish designated activity company, to protect the aggregate motor third party liability (MTPL)
Accumulated depreciation and impairment as at 31 December previous year 0 0
Accumulated depreciation and impairment as at the end of the period 20 -0
Carrying amount as at the end of the period 7,180 6,680
As at 31st December 2019 Group’s goodwill amounted to € 7,180 million. Change in consolidation scope is mainly due to the acquisition in the CEE region of the participations in Adriatic Slovenica, KD Funds Management company LLC and Union Investment TFI S.A, while the goodwill of the CGU Multiboutique has been booked following the acquisition of the participations in CM Investment Solutions Limited loss ratio of 12 of its subsidiaries that write business in the 7 European countries in which Generali has a relevant market share in motor business (Italy, Germany, France, Austria, Czech Republic, Spain and Switzerland ) Generali Group is considered a sponsor because it originated the insurance risk of the structured entity. The Group transfers,by this protection, part of the risk linked to unexpected fluctuations of the MTPL loss ratio. Generali pays a different premium every year depending on the subscribed tranche - being 4% on Class A, 6.25% on Class B and 12% on Class C – on the amount of cover provided corresponding to each tranche amounting to € 85 million. The related cost is presented within the Earned premiums ceded line in the statement of Profit or loss.
– In 2017 Assicurazioni Generali stipulated a reinsurance contract in the current year with Lion II Re DAC, an
The aforementioned vehicles are not consolidated as the Generali Group has no control over the entities and is not exposed to the resulting variable returns.
(CMISL), afterwards renamed Lumyna, and Sycomore Factory SAS. The net asset of the entities acquired, excluding goodwill, amounted to €236 million. During the 2019, the acquired entities contributed for € 499 million to the Group’s revenues.
The impairment of € 20 million refers to the goodwill allocated to the participation held in Argentina, that has been fully impaired as a result of the persistence of the country’s macroeconomic uncertainties.
The goodwill booked was subject to impairment tests as stated by IAS 36. Cash generating units were established in accordance with the Group’s participation structure and considering the IFRS 8 requirements relating to operating segments, which Assicurazioni Generali identified as Life, Non-Life and Asset Management.
The cash flows related to dividends, used in the analysis for each CGU, were those detailed in the Generali Strategic plan approved by the Board of Directors and its subsequent updates. In particular, the data considered for the impairment tests was detailed in the rolling Group plan 2020-2022 as presented to the Board of Directors in December 2019. In order to extend the analysis horizon to a 5 years period, the main economic and financial data were estimated for a further two years (2023 and 2024). The net result (2023 and 2024) was calculated using a sustainable growth rate for each CGU. The table below shows the evaluation parameters used for the main CGU:
The cost of equity (Ke) for each entity is extrapolated based on the Capital Asset Pricing Model (CAPM) formula eventually adjusted to reflects specifics and identified risks.
– Generali Lebensversicherung In April 2019, the Group finalized the sale of the 89.9% of its investment in Generali Lebensversicherung Aktiengesellschaft. The consideration for the 100% sale of the investment is € 1,026 million. The overall positive impact on the result of the period is € 347 million. The remaining 10.1% share has been reclassified within other available for sale financial assets.
With regard to transactions with related parties, the main intra-group activities, conducted at market prices or at cost, were undertaken through relations of insurance, reinsurance and co-insurance, administration and management of securities and real estate assets, leasing, loans and guarantees, IT and administrative services, personnel secondment and claims settlement. These services substantially aim at guaranteeing the streamlining of operational functions, greater economies in overall management, appropriate levels of service and an exploitation of Group-wide synergies. For further information regarding related parties transactions - and in particular regarding the procedures adopted by the Group to ensure that these transactions are performed in accordance with the principles of transparency and substantive and procedural correctness - please refer to the paragraph Related Party Transaction Procedures included in section Internal control and risk management system of the Corporate governance and share ownership report. The most significant economic and financial transactions with Group companies that are not included in the consolidation area and other related parties are listed below.
The subtotal associated companies includes loans to Group companies valued with equity method for € 372 million, mostly related to real estate French companies. The subtotal other related parties includes the transactions with Mediobanca Group regarding investment bonds for € 56 million and financial liabilities amounting to € 29 million. With reference to the paragraph 18 of Related Party Transactions Procedures adopted by the Board of Directors in November 2010 there were no (i) Operations of major importance concluded during the reporting period (ii) Related Party Transactions, concluded during the reference period, which influenced the Group’s financial statements or profit to a significant extent (iii) changes or developments of the Transactions described in the previous annual report that have had a significant effect on the Group’s financial statements or profit.
In the table below Group investments are split into the four IAS categories, as reported on balance sheet, as well as by nature (equity instruments, fixed income instruments, real estate instruments, other investments and cash and similar instruments).
Investments fund units (IFU) are allocated to respective asset classes based on prevailing underling assets. IFU are therefore allocated within the items equity instruments, fixed income instruments, real estate instruments, other investments and cash and similar instruments. Comments on specific balance sheet items are presented in the following paragraphs.
Financial assets at fair value through profit or loss 6,896 1.8% 6,178 1.8%
The increase is mainly attributable to the net purchases made during the year. The increase in the deposit under reinsurance business accepted is driven by the change in perimeter, in particular with reference to the activities in Germany. The increase in other loans is partially compensated by the decrease in unquoted bonds, due to sales and reimbursements. The debt securities of this category are almost entirely investment grade and more than 64.1% of the class boasts a rating greater or equal to A.
The Group limits the use of this category only to high quality quoted bonds that Group companies are able to hold till maturity. Debt securities in this category are almost entirely investment grade. The fair value of the held to maturity investments amounted to € 2,360 million.
This category accounted for 67.9% of the total investments. The increase compared to 31 December 2018 was mainly attributable to the increase in the assets value, in particular for bonds, and to the net purchases of the period.
The item Available for sale assets consists of bonds for 85.1%, of which with a rating higher or equal to BBB, class assigned to the Italian government bonds. As already mentioned, available for sale financial assets
Available for sale financial assets - unrealised gains and losses 31/12/2018
Available for sale financial assets: gains and losses at profit or loss 31/12/2018
Bond securities in this category belong to classes of rating greater than or equal to BBB. The growth compared to 31 December 2018 was mainly due to the increase in value of Investments where the risk is borne by the policyholders and of Investments fund units.
(*) Insurance provisions are net of amounts ceded to reinsurers from insurance provisions.
Gross book value as at the end of the period 16,428 15,799
Fair value of land and buildings (investment properties) at the end of the reporting period is mainly based on external appraisals.
The incidence of maturities of debt securities by asset classes remains substantially in line with that of the previous year.
Bond investments totalled € 291,388 million at the end of the period. The portfolio was composed for € 176,355 million by government bonds, while corporate bonds amounted to € 115,033 million.
Group’s exposures to investments in corporate bonds, detailed by sector and rating, are reported at book value in the following tables: Corporate bonds: breakdown by sector
As of 1 January 2009, the Group transferred to the loans and receivables category € 14,658 million of corporate bonds, according to the IAS 39 reclassification option. At 31 December 2019, after sales and pay backs made up till the balance sheet date, the stock of these reclassified financial instruments amounted to € 1,090 million.
Generali Group in the context of its business activities enters into securities lending transactions (REPO e Reverse REPO). In general, if the Group retains substantially all risks and rewards of the financial assets underlying these transactions, the Group continues to recognise the underlying assets. For REPO contracts, the Group continues to recognise in its financial statements the underlying financial asset as the risks and benefits are retained by the Group. The consideration received upon sale is recognised as a liability.
As far as Reverse REPO transactions are concerned, if all the underlying risks and rewards are retained by the counterparty for the entire life of the transaction, the related financial asset is not recognised as an asset in the Group’s financial statements. The consideration paid is accounted for within the loans and receivable category. Finally, the Group is committed in a variety of transactions in which some financial assets are pledged as collateral but they are still recognised in the financial statements because all risks and rewards are retained by the Group.
As at 31 December 2019, the Group has retained substantially all risks and rewards arising from the ownership of the transferred assets and there are no transfers of financial assets which have been completely or partially derecognised on which the Group continues to control. In particular, the Group continues to recognize, in terms of market value, approximately € 15,128 million of financial assets linked to various contracts such as, securities lending transactions, mainly in France for € 8,292 million, repurchase agreements for € 1,461 and assets pledged as collateral for € 5,375 million (please refer to the paragraph Contingent liabilities, commitments, guarantees, pledged assets and collaterals in section Additional Information ).
The Group’s balance sheet exposure to derivative instruments is mainly associated with economic hedging transactions of financial assets or liabilities, in line with strategies aiming at mitigating financial and currency risks. The total exposure amounts to € 824 million for a corresponding notional amount of € 50,637 million. The notional exposure is presented in absolute amounts, including positions with both positive and negative balances, and it arises for an amount of € 9,035 million from instruments for which a hedge accounting relationship has been formally designated, in accordance with the international accounting standard IAS 39. The remaining notional amount is attributable to derivative instruments for which, notwithstanding their purpose as economic hedging instruments, a formal hedge accounting relationship has not been activated.
The exposure in terms of amounts recognised in the financial statements amounts to € 367 million.
(€ million) Direct insurance Accepted reinsurance Total 31/12/2019 31/12/2018 31/12/2019 31/12/2018 31/12/2019 31/12/2018 of which provisions for liability adequacy test 0 0 0 0 0 0
Provisions for policies where the investment risk is borne by the policyholders and provisions for pension funds of which provisions for liability adequacy test 893 843 5 5 898 847 of which deferred policyholder liabilities 26,254 10,584 0 0 26,254 10,584 ed both the provision for profit sharing and premium refunds, which amounts to € 5,028 million (€ 5,172 million in 2018) and the ageing provisions for life segment, which amount to € 15,836 million (€ 14,785 million in 2018). As part of the technical provisions of the life segment, subject to liability adequacy test, are also included the reservations made in accordance with applicable locally regulations related to the risk of interest rates change.
Provisions for policies where the investment risk is borne by the policyholders and provisions for pension funds
Carrying amount as at the end of the period 269,703 257,711
The increase in mathematical provisions and aging for life segment is mainly attributable to the financial revaluation component linked to the investment result and the positive effect deriving from the change in premiums and payments.
Total insurance provisions, net of reinsurance, include the mathematical provisions and provisions for policies where the investment risk is borne by policyholders and for pension funds (which amounted to € 254,679 million and € 75,363 million respectively), and net ageing provisions for life segment, which amounted to € 15,812 million. In the Life portfolio the policies with significant
Carrying amount as at the end of the period 75,402 63,142
The increase in provisions for policies where the investment risk is borne by policyholders and for pension funds is mainly determined by the development in the market value of funds linked to unit- and index policies, due to financial market movements.
The difference between the ultimate cost of claims and the cumulative paid losses for calendar year 2019 constitutes the claim reserve for accident years 2010 to 2019. The reserve reported in the balance sheet also includes a residual claim reserve that is composed almost exclusively by the accident years not reported in the development triangle.
The observed trend in the ultimate cost for generations 2010-2019 indicates the adequate level of prudence adopted by the Generali Group in its reserving policy.
Cumulative claim payments at the end of accident year 5,763 5,324 5,523 5,422 5,147 5,324 5,475 5,703 5,718 5,990 seven years later 11,768 11,022 11,162 eight years later 11,870 11,124 nine years later 11,943
Reserve for unrealized gains and losses on available for sale financial assets 7,458 3,454
The Group’s own shares are € -7 million, amounting to 309,132 shares. During 2019 the Parent company distributed dividends amounting to € 1,413 million.
The reserve for unrealized gains and losses on available for sale financial assets, i.e. the balance between unrealized gains and losses on financial assets, net of life deferred policyholder liabilities and deferred taxes, amounted to € 7,458 million (€ 3,454 million at 31st December 2018). The increase of investment classified as financial assets available for sale is mainly driven by the decrease of interest rate.
Total comprehensive income 6,696 -66 attributable to the Group 6,268 -208 attributable to minority interests 428 141
Result of the period (€ million) 2,670 2,309 - from continuing operations 2,196 2,135 - from discontinued operations 475 173
Earnings per share (in €) 1.70 1.48 - from continuing operation 1.40 1.37 - from discontinued operations 0.30 0.11
Diluted earnings per share (in €) 1.68 1.45 - from continuing operation 1.38 1.34 - from discontinued operations 0.30 0.11
Net unrealized gains and losses on cash flows hedging derivatives -34 -8
Net unrealized gains and losses on hedge of a net investment in foreign operations 0 0
Actuarial gains or losses arising from defined benefit plans 161 -30
Reconciliation statement of the result of the period and shareholders’ equity of the Group and the Parent Company
Adjustments to Parent Company for IAS/IFRS application 813 208 817 -9
Reserve for other unrealized gains and losses through equity -1,043 -528
Financial liabilities related to investment contracts issued by insurance companies 6,205 6,221
The main Group’s financial liabilities at amortized cost are represented by senior bonds and subordinated liabilities. The following tables sort Senior and Subordinated liabilities into categories based on maturity, or first call date, when applicable. For each category of maturity, the undiscounted cash flows (including the related hedging derivatives), the book value and the fair value of financial liabilities are reported.
Subordinated liabilities issued by Assicurazioni Generali S.p.A. and other subsidiaries are classified in this category. The remaining subordinated liabilities relate to securities issued by Austrian subsidiaries corresponding to an amortized cost of approximately € 25 million.
The fair value of subordinated liabilities amounts to € 9,007 million.
The category of bonds includes several listed senior issues shown below: Main senior bonds issues
To date, the senior bond with expiry date 14 January 2020 was already repaid without refinancing, leading to a debt reduction of € 1,750 million overall.
Bonds and other loans at long term 4,198 -474 0 1,291 7 14 5,036
REPO and other short term financial liabilities 2,097 -701 0 0 0 0 1,396
Other financial liabilities at fair value 36 -1 2 0 0 0 37
Carrying amount as at the end of the period 2,221 2,065
Gross book value as at the end of the period 6,428 6,144
Carrying amount as at the end of the period 2,888 2,505
Gross book value as at the end of the period 3,942 3,484
The item Other changes includes the registration of asset in leasing following to the IFRS 16 first time adoption, for which further information are detailed in the paragraph Leasing in Other information. The fair value of land and buildings (self-used) at the end of the reporting period was mainly based on external appraisals.
Accumulated depreciation and impairment as at 31 December previous year -1,254 -1,237
Carrying amount as at the end of the period 1,295 1,263
Gross book value as at the end of the period 2,616 2,517
Other tangible assets, which amounted to € 1,295 million (€ 1,263 million at 31 December 2018), mainly includes property inventories for an amount of € 890 million (mainly related to Citylife project) and furniture, fittings and office equipment, net of accumulated amortisation and impairment losses (€ 324 million). The item Other changes highlights the reclassification of properties for which the 21 Receivables
Non-current assets or disposal groups classified as held for sale 0 55,914
The decrease on other assets is attributable to Non-current assets or disposal groups classified as held for sale and related to assets in Belgium, Guernsey and Germany, which in 2018 were in the disposal process. For more details on the item Non-current assets or disposal groups classified as held for sale, reference should be made to paragraph Non-current assets or disposal group classified as held for sale.
For details on deferred taxes please refer to paragraph Income taxes of the section Notes to the income statement.
Provisions for commitments and other provisions included provisions for corporate restructuring, litigation or similar events as well as other commitments for which, at balance sheet date, an outflow of resources to settling the related obligation is considered probable and reliably estimated. The amounts recognized in the financial statements represents the best estimate of their value. In particular, in the assessment all the peculiarities of the specific pro-
The deadlines for the filing of final and reply briefs originally granted by the Arbitral Tribunal have been extended respectively to January 31, 2020 and April 26, 2020.
The parties have therefore filed their final briefs in which they have reiterated their positions both in fact and in law. Generali have again firmly objected to the counterparty ’s claims, including by reiterating its preliminary exceptions.
Considering the complexity and the uncertainty of the litigation both in terms of an and quantum and the legal opinions acquired in this regard, it is considered that the conditions of probability and ability to make a reliable estimate that are required by IAS 37 to make any provisions for risks related to the abovementioned request for damages are not met.
visions are taken into account, including the effective period of incurrence of the contingent liabilities and consequently the expected cash flows on the different estimates and assumptions. According to IAS 12 and by considering the IFRIC update published on September 2019, there was reclassified provision for income taxes from Provision to current tax liabilities for € 66 million. The provision not reclassified are referred exclusively to indirect taxes.
Liabilities directly associated to non-current assets and disposal groups classified as held for sale
The decrease on other payables is attributable to Liabilities directly associated to non-current assets or disposal groups classified as held for sale and related to assets in Belgium, Guernsey and Germany, which in 2018 were in the disposal process. For more details on the item Non-current assets or disposal groups classified as held for sale, reference should be made to paragraph Non-current assets or disposal group classified as held for sale.
(€ million) Gross amount Reinsurers' share Net amount 31/12/2019 31/12/2018 31/12/2019 31/12/2018 31/12/2019 31/12/2018
Financial investments back to policies where the investment risk is borne by the policyholders and related to pension funds
The net income from financial assets at fair value through profit or loss mainly referred to the life segment (€ 10,171 million). This item is not material for non-life segment (€ -33 million).
29 Income and expenses from subsidiaries, associated companies and joint ventures
Reversal of impairment of land and buildings (investment properties) 16 30
Reversal of impairment of available for sale financial assets 23 27
Change in other insurance provisions 1,568 541 -1 16 1,567 557 33 Fee and commissions expenses and expenses from financial service activities
Impairment losses 52 12 35 Expenses from other financial instruments and land and buildings (investment properties)
Net acquisition costs and other commissions 4,695 4,437 3,893 3,578 0 -0
The components of the income tax expense for 2019 and 2018 are as follow: Income taxes
In France, income taxes are calculated by using an overall corporate income tax rate of 34.43%. In particular, this overall rate includes the basic rate expected in the tax on corporate income, equal to 33.33%, increased by an additional (contribution sociale) of 3.30% and a further additional temporary always calculated with reference the standard rate. All other foreign subsidiaries apply their national tax rates, including: Austria (25%), Bulgaria (10%), China (25%), Czech Republic (19%), the Netherlands (25%), Poland (19%), Romania (16%), Spain (25%), Switzerland (21%) and United States (21%). The following table shows a reconciliation from the theoretical income tax expense, by using the Italian corporate income tax rate of 24%, to the effective tax rate.
Effect of permanent differencies and foreign tax rate differential 17 -54
Fiscal losses carried forward are recognised to the extent that future taxable income will be sufficient to offset the amount of the losses before their expiration. Fiscal losses carried forward are scheduled according to their expiry periods as follows.
With regards to fiscal losses, it is worth noting that Italian Law by Decree 98/2011 introduced that fiscal losses can be carried forward with no time limits (as opposed to the previous five-year limitation). Losses from a given year may, however, only be used to offset up to 80% of the taxable income of any following fiscal year. Deferred income taxes are calculated on the temporary differences between the carrying amounts of assets and liabilities reported in the financial statements and their tax base, by using the tax rates applicable at the expected time of realisation according to each country’s current legislation. The ultimate realisation of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Furthermore, in making this assessment, management considers the scheduled reversal of deferred tax liabilities and tax planning strategies. Assessments show that deferred tax assets will be recovered in the future through either (i) expected taxable income of each consolidated company or (ii) expected taxable income of other companies included in the same tax group (e.g. Consolidato fiscale in Italy, Steuerliche Organschaft in Germany and Régime d’intégration fiscale in France).
IFRS 13 - Fair Value Measurement provides guidance on fair value measurement and requires disclosures about fair value measurements, including the classification of financial assets and liabilities in the levels of fair value hierarchy. With reference to the investment, Generali Group measures financial assets and liability at fair value of in the financial statements, or discloses it in the notes.
Financial assets at fair value through profit or loss 17,198 17,198
Financial liabilities at fair value through profit or loss 4,983 4,983
Assets and liabilities measured at fair value in the consolidated financial statements are measured and classified in accordance with the fair value hierarchy in IFRS 13, which consists of three levels based on the observability of inputs within the corresponding valuation techniques used. The fair value hierarchy levels are based on the type of inputs used to determine the fair value: – Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
The table shows the classification of financial assets and liabilities measured at fair value among the levels of fair value hierarchy as defined by IFRS 13.
Fair Value Hierarchy 31/12/2019 Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss 87,062 6,531 2,080 95,672
Other assets at fair value through profit or loss 0 277 81 358
Financial liabilities at fair value through profit or loss 3,035 1,847 101 4,983
Fair Value Hierarchy: comparative period 31/12/2018 Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit or loss 72,525 5,349 1,625 79,499
Financial liabilities at fair value through profit or loss 2,830 1,244 84 4,159
Generally, transfers between levels are attributable to changes in market activities and observability of the inputs used in valuation techniques to determine the fair value of certain instruments. Financial assets and financial liabilities are mainly transferred from level 1 to level 2 when the liquidity and the frequency of transactions are no longer indicative of an active market. Conversely, for transfers from level 2 to level 1.
It includes unquoted IFU funds, private equity and hedge funds, which are classified into available for sale and fair value through profit or loss. Their fair value is substantially provided by the fund administrators on the basis of the net asset value of the fund. The fair value of these investments is closely monitored by a team of professionals inside the Group.
Financial liabilities at fair value through profit or loss 85 48 1 0 - Financial liabilities related to investment contracts issued by insurance companies
Fair Value Hierarchy of assets and liabilities not measured at fair value 31/12/2019 Level 1 Level 2 Level 3 Total
Fair Value Hierarchy of assets and liabilities not measured at fair value 31/12/2018 Level 1 Level 2 Level 3 Total
In particular, mortgages and other loans are valued on the basis of future payments of principal and interest discounted at the interest rates for similar investments by incorporating the expected future losses or alternatively discounting (with risk-free rate) to the probable future cash flows considering market or entity- specific data ( ie probability of default). These assets are classified as level 2 or 3 depending on whether or not the inputs are corroborated by market data. If the fair value cannot be reliably determined, the amortized cost is used as the best estimate for the determination of fair value.
The other liabilities, not related to insurance operations, consist mainly of liabilities to banks and bank customers The information required by the amendment to IFRS 4 for financial instruments as at 31 December 2019 is provided below.
43 Disclosure regarding the deferred application of IFRS 9 - Financial Instruments
The following disclosure is provided on the credit risk of the financial instruments that give rise to specific dates for cash flows consisting exclusively of principal and interest payments; specifically, the carrying amount in accordance with IAS 39 for rating classes of financial instruments that give rise to specific dates for cash flows consisting of exclusively of payment of principal and interest.
Financial assets managed on fair value basis and held for trading* 93,494 -
Investments back to policies where the risk is borne by the policyholders and pension funds**
Other financial instruments that do not give rise on specified dates to cash flows that are solely payments of principal and interest *,** The fair value change of financial assets measured at fair value through profit or loss is provided in the relative section in the notes.
**** These assets would be measured as at fair value through profit or loss if IFRS 9 was applied.
The counterparty for term deposits is generally assessed by using the highest available rating, where possible, and considering minimum rating requirements, in particular, BBB for Group companies in countries classified as investment grade, or similar to the sovereign debt rating in countries that have a rating below investment grade. Repurchase agreements are mainly with bank counterparties with high credit ratings.
Application of IFRS 9 by Group companies for their separate financial statements
Net liability as at 31 December current year 4,309 3,722 for Trattamento di fine rapporto (employee severance pay) matured until 1st January 2007 is included in the provisions for defined benefit plan for € 97 million. The table below shows the movements in the defined benefit plans liability which occurred during the financial year, net of assets legally separate and held solely to pay or fund employee benefits: Part of the Group’s defined benefit plans have assets that are designated, but not legally segregated, to meet the pension defined benefit obligations. These are investments backing insurance provisions or policies issued by Generali Group companies, or other investments owned by the Group entities. Consequently, in accordance with IAS 19, these investments are not recognised as plan assets and so cannot be deducted from the defined benefit obligations. However, to assess the net liability for defined benefit plans, these assets should have been netted against the present value of the related pension obligations.
The amounts reported are gross of deferred taxes and deferred policyholders’ liabilities, where applicable. The table below shows the movements in the defined benefit obligation during the financial year and the current value of the plan assets: The re-measurement of liabilities related to defined benefit plans and plan assets, recognised in Other comprehensive income are detailed as follows: Re-measurements recognised in Other Comprehensive Income
Defined benefit obligation as at 31 December previous year 4,808 5,116
Defined benefit obligation as at 31 December current year 5,485 4,808
Fair value of plan assets as at 31 December 1,176 1,086
To provide an indication of the effect of the defined benefit plans on the future cash flows of the Group, the future expected payments, divided by bands of maturity, are presented below: Defined benefit plans: expected payments
46.1 Share-based compensation plans granted by the Parent Company Long-Term Incentives (LTI) represent the long-term variable remuneration of Generali, which takes the form of multi-year plans, approved from time to time by the competent bodies and may be addressed to directors, managers with strategic responsibilities and other Generali employees; they may be based on cash disbursements or financial instruments. The plan LTI 2016 has fully accrued its relevant cost component in the first half of the year, coming to a close with the equity instruments assignment upon verification of the Group’s performance levels in terms of Operating ROE and relative TSR. The LTI plans 2017 and 2018, currently in progress, may result in shares’ granting respectively in 2020 and 2021, subject to the Group performance level (determined by the comparison of ranges of Operating ROE and relative TSR) and the overcoming of the minimum level, where requested in terms of Regulatory Solvency Ratio. Further details are given in the information reports approved at the time by the Shareholders’ Meeting and published on the Generali Group website, as well as in the Remuneration Report annually published. A new long-term incentive plan based on Assicurazioni Generali shares – Group Long Term Incentive (LTI) 2019 - has been submitted for the approval of the Shareholders’ Meeting. In line with market practices and investor expectations, shares are assigned and made available to beneficiaries over a deferred long-term time span, subject to the achievement of Group’s performance conditions (Net
Our performance Risk Report average ROE, EPS growth and relative TSR) and the achievement of a minimum level of Regulatory Solvency Ratio, as the only access threshold, as detailed below. The Plan is based on the following essential aspects: – the incentive connected with the achievement of the targets is paid through the grant of Assicurazioni Generali S.p.A. ordinary shares.; – the right to receive the shares is subject to an entry threshold, defined annually by the Board of Directors and which represents a condition precedent; – the targets to which payment of the incentive is subject are Group financial ones and are defined at the beginning of the performance period and kept consistent with the strategic long-term plans of the group.
The performance level is expressed as a percentage of the level of Net average ROE, EPS Growth and relevant TSR reached, and it is determined with reference to three independent baskets. The final results in each basket are calculated using a linear interpolation approach. With specific reference to the TSR, the relevant payment is contemplated if the Group’s positioning is higher than the first quartile. The maximum performance level is 175% overall for the GLG members (or a different percentage considering the role of the related beneficiaries). During each year of the plan and at the end of the threeyear performance period, the Board of Directors evaluates the degree to which access threshold has been achieved, defined in terms of Regulatory Solvency Ratio equal to 130% - the limit set considering the hard limit level defined in the Group Risk Appetite Framework - or an alternative percentage as may be chosen from time to time by the Board of Directors. This evaluation is a malus mechanism based on which the number of shares to grant definitively may be reduced or set at zero by the Board of Directors should the Regulatory Solvency Ratio be lower than the set threshold. The Board of Directors is also entitled to set a reduced number of shares to grant definitively should the Regulatory Solvency Ratio be lower than the soft limit level established by the Risk Appetite Framework, that is 150% - but in any case higher than 130%.
In any case, no incentive will be paid in the event of a significant worsening of the capital and financial situation of Generali. Any amount disbursed will be subject to claw-back if the performance considered should later be found to be non-lasting or ineffective as a result of willful misconduct or gross negligence. Moreover, starting from the LTI 2019 plan, in keeping with the contractual agreements with the future Managing Director/ CEO who, in the event of termination of office during the three-year mandate, will retain the rights arising from the plan only pro rata temporis and only if the so-called good leaver conditions are met (subject to reaching the targets and other terms and conditions of the relevant regulation). On the other hand, should he be classified a bad leaver, he shall lose all rights arising from the existing plan relating to the period of said mandate. A bad leaver is one who voluntarily renounces the posi-
tion during the three-year mandate and his/her revocation for just cause. A good leaver meets all of the other conditions for termination of the relationship. In line with what has already been established for the existing plans, a dividend equivalent mechanism has been introduced in the 2019 Plan on the basis of the dividends distributed during the performance period. In particular, should the shareholders’ meeting resolve upon the distribution of dividends in favour of the shareholders during the three-year reference period, at the expiry of such three-year reference period, an additional number of shares determined in relation to the overall dividends distributed during the three-year reference period will be assigned in favour of the beneficiaries. The additional number of shares thus determined shall be assigned simultaneously and in relation with the other shares assigned in favour of each beneficiary, subject to the same restrictions (holding period) and determined considering the shares’ value at the assignment of the plan, to be calculated as the average price of the share in the three months prior to the meeting of the Board of Directors called to resolve on the draft statutory financial statements of the Parent Company and the consolidated financial statements for the year before that when the Plan is started.
– surpassing predetermined Regulatory Solvency Ratio thresholds; – remaining in office as Managing Director/Group CEO until the end of the current term.
The plan includes granting shares that may have accrued, for 50%, at the end of the performance period and, for the remaining 50% after another two years have passed (subject to fixed gates being surpassed in terms of Regulatory Solvency Ratio and the case of malus not occurring). The Plan also contemplates the obligation of the Managing Director/Group CEO to maintain - for one more year - ownership of 50% of the shares that might have been granted to him free of charge (both as part of the first and of the second tranche indicated above), and other typical clauses of sustainability (e.g. malus, clawback, non-hedging) to protect the Company ’s capital strength and the non-excessive exposure to risk. Furthermore, the Plan includes the granting of additional shares, calculated based on the amount of the dividends distributed over the period of reference as a whole (i.e. during the period of performance and during the two years of further deferral). The condition linked to the TSR is a market condition; the other conditions previously indicated are service conditions. The estimated fair value of the right subject to performance in terms of TSR was calculated multiplying the forward price (considering the lock-up period) of the share by the grant date of Plan approval with the relevant payout, and is € 1.9. The total cost of the plan, sum of the two components described above, was allocated over a period of accrual of three years in line with the service period required. In the context of the new 2019-2021 strategic plan, a share plan for Group employees was submitted to the approval of the Shareholders’ Meeting for 2019, and it includes the possibility to purchase Assicurazioni Generali shares at facilitated conditions, assigning free shares (matching and dividend equivalent) defined in proportion to the number of shares purchased and to the distributed dividends should the share value appreciate. The plan will indicatively begin in October 2019 and will last 3 years. The plan will be offered to the employees who are employed by Assicurazioni Generali or by a Group company, except for the members of the Group Management Committee (GMC) and of the Global Leadership Group (GLG). The Generali Board of Directors will specifically identify the categories of beneficiary employees of the plan when it implements the plan.
B) If the share value appreciates, each participant will have the possibility to decide whether to sell all of the shares, receiving the counter-value in cash, or if he/ she decides to hold them, except for the shares that will in any case be sold to pay the taxes due. The maximum number of shares comprised in the plan is 6,000,000, accounting for 0.38% of the current share capital. The plan will be implemented through purchase of treasury shares on the market, hence without diluting capital.
The cost associated with all above mentioned outstanding plans recognized during the period amounted to € 70 million. The maximum number of shares that can be granted in relation to mentioned plans is approximately 31 million. As at the reporting date, there are no other management incentive plans.
2 Bank of Italy Circular no. 285/2013 Supervisory provisions for banks - Part I Title IV Chapter 2 Remuneration and Incentive Policies and Practices. 3 No limits for exercising voting rights and for awarding property rights are contemplated during the retention period unless receiving dividends is not provided for. 4 Required by the Management by Objective (MBO) mechanism or by specific incentive/hire plans..
46.2 Share-based compensation plans granted by the other Group companies The main share-based payments granted by the other Group companies are detailed here below.
At the date of 31 December 2019 there are the following share-based compensation plans: – the plans implemented regarding the Banca Generali Group remuneration and incentive policy in force at the time, based on which a portion of variable remuneration to key personnel must be paid through payments based on own financial instruments; – the plans implemented as part of the 2017-2026 framework loyalty programme, approved by the Shareholders ’ Meeting of 20 April 2017, which had reached the third annual cycle 2019-2026 and contemplates payment of a portion of the indemnity accrued up to a maximum of 50% in own financial instruments; – the new LTI (Long Term Incentive) plans for the top management of the banking group based on Banca Generali shares activated starting from financial year 2018.
The payment in shares is made after the Board of Directors verifies the economic results of the relevant year and is therefore conditioned not only by the meeting of the set targets4, but also by surpassing access gates of the Banking Group (TCR Total Capital Ratio, LCR Liquidity Coverage Ratio) relating to the year the remuneration accrues and the two years following the deferral, if necessary.
– agreements entered into in view or at the time of the early termination of employment or agency regarding beneficiaries falling under the classification of key personnel.
Recognition of the value of the plans determined in this manner in the equity is done pro rata temporis based on the period of accrual of the vesting conditions, i.e. the period elapsing between the grand and the final accrual of the right to receive the shares, also taking into account the probability that the conditions for all recipients to exercise it do take place.
Since the plans are usually broken down into multiple tranches with differentiated vesting periods, each of them is measured separately. Specifically, in the case shares are granted in three tranches, with the first amount up front (60%) following approval of the financial statements of the year of reference and two deferred annual amounts
Three share-based payment cycles tied to the Remuneration Policies for the years 2017, 2018 and 2019 are active as at 31 December 2019, while the cycle relating to the year 2016 is basically depleted, of which only one ten-year hiring plan remains active. The share-based payment plan linked to the 2017 Remuneration Policies, approved by the Shareholders’ Meeting of 20 April 2017, has the following characteristics: – The reference price of the Banca Generali share, for the purposes of determining the number of shares to be allocated, was determined as the average of the official quotations between 12 December 2016 and 9 March 2017, at € 23.73; – The fair value of the Banca Generali share on the grant date of the shares was determined based on the market price recorded as at 20 April 2017, amounting to approximately € 25.4, later adjusted to take into account the loss of the dividends expected in the period of deferral.
Within this cycle, the shares to be allocated to key personnel totaled 146,436, of which 98,457 assigned to network managers, 30,973 relating to ordinary incentives and hiring bonuses paid to financial consultants considered key personnel owing to the commission volume accrued, 16,311 to employees and 4,297 relating to the subsidiary BGFML, for a total fair value of about € 3.7 million.
5 Starting from the year 2018 the IFRS2 charges relating to the ordinary incentives accrued by the financial consultants and linked to net inflow or new customer acquisition targets that may be paid out in shares are recorded along the broader 5-year time horizon. Furthermore, the disbursements in shares relating to several plans to hire financial consultants included in the key personnel can be covered by prior allocations to provisions for commission risks and charges only after the plan is concluded.
6 Particularly falling within this category are the bonuses in shares paid to the key personnel and, in some cases, to the managers of the subsidiary BGFML.
The share-based payment plan linked to the 2019 Remuneration Policies, approved by the Shareholders’ Meeting of 12 April 2019, has the following characteristics: – the reference price of the Banca Generali share, for the purposes of determining the number of shares to be allocated, was determined as the average of the official quotations between 10 December 2017 and 8 March 2018, at € 20.24; – The fair value of the Banca Generali share on the grant date of the shares was determined based on the market price recorded as at 18 April 2018, amounting to approximately € 23.77, later adjusted to take into account the loss of the dividends expected in the period of deferral.
In relation to the assessment of the achievement by the key personnel of the objectives set for 2019 it is estimated that the share of variable compensation subject to payment of shares amounts to approximately 216 thousand shares, for a total fair value of the plan of € 4.7 million. Finally, with reference to the 2016 Remuneration Policies, an entry plan subject to long-term deferral is active still today. It entails paying ten annual variable amounts from 2016 to 2025, which are further subject to deferral and payment in shares provided for by the Remuneration Policy in force at the time. The last instalment of the plan will therefore be paid during 2028. In addition to continuation in service, payment of the bonus is also conditioned by maintaining the net inflow targets originally met. The shares to be granted as part of this plan are currently quantified as 18,302, of which 4,706 already granted. With reference to meeting the performance targets set out in the Remuneration Policy for 2016, 2017 and 2018, during the year 128,930 treasury shares were granted to executives and network managers, of which 20,882 relating to employees or former employees and 108,048 relating to area managers and financial consultants7.
More specifically, the grants concerned, respectively, the first and second deferred tranche with one-year deferral (20%) relating to the years 2016 and 2017, the up-front portion (60%) relating to 2018 and, for a residual portion, prior plans with different deferral characteristics for former employees and financial consultants.
The 2017-2026 Framework Sales Network Loyalty Programme was approved by the Board of Directors during its meeting on 21 March 2017 and was later ratified by the Shareholders’ Meeting on 20 April 2017. The Framework Loyalty Programme provides the possibility to activate 8 single annual plans with fixed expiration on 31 December 2026 and decreasing duration, subject to the annual authorization of the Banca Generali Shareholders’ Meeting. Payment of the indemnity accrued along the entire time span of the Programme will however be made at one single time, within 60 days from the Shareholders’ Meeting called to approve the 2026 financial statements. The payment of a portion of the accrued indemnity up to 50% at the most, partly in Banca Generali shares subject to the assessment of potential effects on the equity ratio and floating capital by the corporate bodies (Board of Directors and Shareholders’ Meeting), can be allowed. Participation in each of the plans included in the Programme is offered to the financial Consultants and Relationship Managers who have accrued at least 5 years of company seniority by 31 December of the corporate year before the one of reference of the single plans. The following is necessary in order to be able to gain access to the benefits of the activated plans: – reach a minimum volume of total AUM and qualified AUM growing over time and with non-negative net inflows (condition for accrual) by the end of the year of reference; – be regularly in service and not having given advance notice as at the date of payment, except for the cases in which termination depends on causes of death or permanent disability, retirement or withdrawal from the relationship by Banca Generali not backed by just cause (service condition).
Lastly, the accrued indemnity is proportionate to a rate of the verified AUM for every single plan and is differentiated based on the type of subject (Consultant/RM) and on seniority of service up to reaching a cap.
(€ thousand) max. no. of shares No. of shares net estimated turnover Fair value plan (million euros)
It is for this reason that the new incentive plans provide for: – The granting to beneficiaries of Banca Generali shares purchased on the market in place of shares of the parent company Assicurazioni Generali that it directly grants; – Greater impact of the targets pertaining to the banking group, which weigh 80%.
The key characteristics of the plan are the following8: – The maximum number of shares to grant is determined at the beginning of the period of reference based on a multiplier of the current remuneration of the beneficiaries9 and is divided into three notional tranches that refer to each of the three years of duration of the plan; – After verifying the surpassing of the access gates10 of the banking group and insurance group, each year the Board of Directors of Banca Generali assesses the level of meeting the targets set at the beginning of the three-year period and determines the actual number of shares potentially due with reference to the specific tranche; – At the end of the three-year period, having verified that the access gates have been surpassed, the entirety of the shares accrued for each of the three tranches is disbursed at a single time by free granting to the beneficiaries ordinary treasury shares repurchased on the market (stock granting), provided that the beneficiary is still employed by a banking group company (service condition); – 50% of the granted shares are immediately available at the time of granting, while the remaining 50% is subject to an addition two-year lock-up period11; – The plan does not contemplate dividend equivalent mechanisms, in line with the regulations and with the most common practices in the banking market.
– Usual malus and claw back clauses are also included. Il livello di raggiungimento degli obiettivi, espresso in misura percentuale, viene determinato separatamente per ogni basket, costituito da un indicatore e dalla relativa ponderazione, utilizzando la metodologia dell’interpolazione lineare rispetto ai livelli di riferimento fissati all’inizio del piano (minimo, target, massimo)12. The performance indicators defined for the plans activated up until now are shown below.
8 Additional information on the functioning of the LTI plans is found in the Remuneration Report, approved each year by the ordinary shareholders’ meeting of Banca Generali, in Section 2 Remuneration and incentive policies of the banking group.
9 The maximum potential bonus to be disbursed in shares amounts to 175% of the gross annual remuneration of the plan’s participants for the Top Management members, while it is 87.5% for the other beneficiaries.
11 Without prejudice to the Managing Director’s right to retain an adequate number of granted shares until the end of the mandate in progress at the lock-up date. 12 In particular, a percentage of 175% is associated with the maximum performance level.
Our performance Risk Report of occurrence is not considered as remote, however not sufficiently material to recognise them as liabilities on the balance sheet. A contingent liability is: – a possible obligation that arises from past events and whose existence will be confirmed only by occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the entity; or
– a present obligation that arises from past events but is not recognized because: (i) it is not probable than an outflow of resources embodying economic benefits will be required to settle the obligation; or
Generali Group at 31 December 2019 held outstanding commitments for a total amount of € 10,482 million, related to potential commitments on investments, loans and other commitments.
Because part of these commitments may expire without being called, the amounts disclosed are not indicative of the actual liquidity needs arising from these commitments. In particular, € 7,685 million represent commitments associated with alternative investments (private equity), mainly allocated in private equity funds which are consolidated line-by-line by the Group. Moreover, € 2,044 million refer to several investment opportunities and, in particular, to real estate investment funds and equities. The potential commitments to grant loans amount to € 284 million, mainly associated to liquidity or funding needs of the customers of the Group’s banking operations.
47 Contingent liabilities, commitments, guarantees, pledged assets and collateral 47.1 Contingent liabilities
The assessment of the number of shares due is made distinctly for each plan year and for each of the weighed baskets linked to the targets of the banking group and the insurance group. As a whole, the shares granted and under accrual to serve the three plans amount to approximately 241 thousand for a total value of € 4.7 million, of which € 2.1 already recorded in the income statement.
As far as other commitments are concerned, the main part that amounted totally to € 436 million refers to potential commitments of the German life companies towards a specific German entity founded in order to protect the local policyholders if the funds already available within the policyholders protection scheme are not sufficient to face the insolvency of one or more insurers.
The Group’s nominal exposure towards third parties amounts to € 323 million, of which € 169 million refer to guarantees provided in the context of the Group’s real estate development and € 97 million to sureties normally given by Banca Generali as part of it ordinary business. Furthermore, the Group in the context of its business operations in some countries receives guarantees provided by third parties, mainly in the form of letters of credit.
Right of use assets are not to presented separately from other assets in the balance sheet, they are allocated based on their nature within specific Balance sheet items. Balance sheet items Land and buildings (self-used) and Other tangible assets are the ones impacted by new IFRS 16 requirements. In details, below the carrying amount of right-of-use assets at the end of the reporting period by class of underlying asset can be found.
Fair value of assets subject to leasing is supposed to be, besides for some rare cases, aligned to its carrying amount.
Under IFRS 16, new right-of-use assets are subject to impairment requirements of IAS 36. Similar to other assets, a right-of-use-asset is tested for impairment when impairment indicators exist. In general, if impairment indicators exist, an entity must determine whether the right-of-use-asset can be tested on a stand-alone basis or whether it will have to be tested at a cash generating unit (CGU) level. This will depend on whether the right-of-use-asset generates largely independent cash inflows from other assets or groups of assets.
At Group level, based on facts and circumstances, it is considered that right-of-use-assets are not able to generate largely independent cash inflows and therefore they have been assessed for impairment at a CGU level rather than at an individual asset level.
Lease liabilities as at 31th December 2019 amounted to € 656 million, while total cash outflows of the period amounted to € 114 million. Lease liabilities are included in item Other financial liabilities on the Balance sheet. Here below a maturity analysis of undiscounted lease payments can be found.
Amount of undiscounted lease payments as at 31 December 2019 with maturity of more than 5 years includes, among others, a peculiar lease contract with a duration of almost 200 years. Short-term leases to which Group lessees are committed and exposed in the next reporting year amounted to € 6 million.
(*) In this item is also included income arising from leases with negative yields
With reference to the possible impacts of Coronavirus please refer to the Outlook chapter.
Ta ng ib le a nd in ta ng ib le a ss et s
La nd a nd b ui ld in gs (s el f u se d)
Ot he r i nt an gi bl e as se ts 2, 2,
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Newly consolidated: 1. Adriatic Slovenica Zavarovalna družba d.d., Koper 2. Aperture Investors, LLC, London 3. Aperture Investors UK, Ltd, London 4. Axis Retail Partners S.p.A., Milan 5. BG Valeur S.A., Lugano 6. BRITISH CORNER s.r.o., Prague 7. CityLife Sviluppo 2 S.r.l., Milan 8. DB Real Estate Spezial Invest Portugal - Sociedade Imobiliária S.A., Lisbon 9. Dialog Versicherung Aktiengesellschaft, Munich 10. Europ Assistance Clearing Center GIE, Gennevilliers 11. Generali Alpha Corp., Wilmington 12. Generali Cliente, Agencia de Seguros Exclusiva, SL, Madrid 13. Generali Core High Street Retail Fund, Luxembourg 14. Generali Global Infrastructure S.A.S., Paris 15. Generali Insurance Brokers – Russia and CIS Limited Liability Company, Moscow 16. Generali Investments Towarzystwo Funduszy Inwestycyjnych S.A., Warsaw 17. Generali Investments, družba za upravljanje, d.o.o., Ljubljana 18. Generali Jeniot S.p.A., Milan 19. Generali Real Estate Debt Investment Fund Italy (GREDIF ITA), Trieste 20. Generali Real Estate Debt Investment Fund S.C.Sp RAIF, Luxembourg 21. Generali Real Estate Logistics Fund S.C.S. SICAV-RAIF, Luxembourg 22. Generali Russia, Moscow 23. Generali SCF Sàrl, Luxembourg 24. Generali Shopping Centre Fund GP S.à r.l., Luxembourg 25. Generali Shopping Centre Fund S.C.S. SICAV-SIF, Luxembourg 26. GRE PAN-EU Berlin 1 S.à r.l., Luxembourg 27. GRE PAN-EU LISBON 1, Lisbon 28. I.J.O. PRAGUE INVESTMENTS s.r.o., Prague 29. Lumyna Investments Limited, London 30. Nextam Partners S.p.A, Milan 31. Nextam Partners Ltd, London 32. Nextam Partners SIM S.p.A., Milan 33. NextamPartners SGR S.p.A., Milan 34. Ovocný Trh 2 s.r.o., Prague 35. Palác Špork, a.s., Prague 36. PARCOLOG FRANCE, Paris 37. Sarl Parcolog Lyon Isle d'Abeau Gestion, Paris 38. SCI Galilée, Paris 39. SO SPV 57 Sp. Z o.o., Warsaw 40. Sycomore Asset Management S.A., Paris 41. Sycomore Factory SAS, Paris 42. Sycomore Market Solutions SA, Paris 43. Trip Mate, Inc., Topeka
4. Europ Assistance España S.A. de Seguros y Reaseguros, Madrid - Merged in Europ Assistance S.A.
9. Generali Investments Asia Limited, Hong Kong 10. Generali Lebensversicherung Aktiengesellschaft, Munich 11. Generali Portfolio Management (CI) Ltd, St. Peter Port 12. Generali Properties S.p.A., Trieste - Merged in Generali Italia S.p.A.
15. Generali Worldwide Insurance Company Limited, St. Peter Port 16. GID Fonds GLAKOR, Frankfurt 17. GID Fonds GLLAE, Cologne 18. GID Fonds GLMET, Frankfurt 19. GID Fonds GLRET, Cologne 20. GID Fonds GLRET 2, Frankfurt 21. GID Fonds GLRET 3, Frankfurt 22. GID Fonds GLRET 4, Frankfurt 23. GID Fonds VLAOT, Cologne 24. GID-Fonds GLRET 5, Frankfurt 25. GIE-Fonds AADMGI, Cologne 26. GLL AMB Generali 200 State Street, Munich 27. GLL AMB Generali Properties Fund I GmbH & Co. KG, Munich 28. GLL AMB Generali Properties Fund II GmbH & Co. KG, Munich 29. GLL GmbH & Co. Retail KG i.L., Munich 30. GLL Properties 444 Noth Michig. LP, Delaware 31. GLL Properties Fund I LP, Delaware 32. GLL Properties Fund II LP, Delaware 33. GRE PAN-EU Frankfurt 2 S.à r.l., Luxembourg 34. SCI Iliade Massy, Paris 35. Thuringia Generali 1.Immobilien AG & Co. KG, Munich 36. Thuringia Generali 2.Immoblien AG & Co. KG, Munich 37. Volksfürsorge 1.Immobilien AG & Co. KG, Hamburg 38. Volksfürsorge 5.Immobilien AG & Co. KG, Hamburg 39. Wielkopolskie Towarzystwo Ubezpieczeń Życiowych i Rentowych Concordia Capital SA, Poznan - Fusa in Generali Życie Towarzystwo Ubezpieczeń Spółka Akcyjna * Consolidation area consists of companies consolidated “line by line”.
Method(1) Activity(2) Shareholding % Group Equity Ratio(3)Direct Indirect Through Total 0.01 Generali Italia S.p.A.
UMS - Immobiliare Genova S.p.A. 086 EUR 15,993,180 G 10 99.90 Generali Italia S.p.A. 99.90 99.90
Europ Assistance Italia S.p.A. 086 EUR 12,000,000 G 1 73.95 Europ Assistance Holding S.A.S. 100.00 100.00 26.05 Generali Italia S.p.A.
Europ Assistance Trade S.p.A. 086 EUR 540,000 G 11 91.56 Europ Assistance Italia S.p.A. 100.00 100.00 8.44 Europ Assistance VAI S.p.A.
Europ Assistance VAI S.p.A. 086 EUR 4,324,620 G 11 100.00 Europ Assistance Italia S.p.A. 100.00 100.00
Banca Generali S.p.A. 086 EUR 116,851,637 G 7 9.63 Generali Vie S.A. 50.81 50.68 0.44 Genertel S.p.A.
Fondo Scarlatti - Fondo Immobiliare chiuso 086 EUR 510,756,634 G 10 2.89 Generali Vie S.A. 76.57 76.53 1.94 Genertel S.p.A.
Fondo Immobiliare Toscanini 086 EUR 755,711,319 G 10 1.78 Generali Vie S.A. 100.00 99.98 0.34 Genertel S.p.A.
302 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Method(1) Activity(2) Shareholding % Group Equity Ratio(3)Direct Indirect Through Total 32.49 Alleanza Assicurazioni S.p.A.
Nextam Partners SGR S.p.A. 086 EUR 1,102,129 G 8 100.00 Nextam Partners S.p.A 100.00 50.68
CityLife Sviluppo 2 S.r.l. 086 EUR 10,000 G 10 100.00 Fondo Immobiliare Mantegna 100.00 99.45
D.A.S. Difesa Automobilistica Sinistri - S.p.A. di Assicurazione 086 EUR 2,750,000 G 1 50.01 Generali Italia S.p.A. 50.01 50.01
Fondo Canaletto 086 EUR 118,817,500 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Generali Real Estate S.p.A. SGR 086 EUR 6,732,889 G 8 100.00 Generali Real Estate S.p.A. 100.00 100.00 28.29 Generali Deutschland AG
Fondo Donizetti 086 EUR 1,331,143,066 G 11 1.43 Europ Assistance Italia S.p.A. 100.00 100.00 29.35 Alleanza Assicurazioni S.p.A.
Fondo Immobiliare Schubert - comparto 2 086 EUR 124,450,000 G 11 100.00 Generali Italia S.p.A. 100.00 100.00
GDPK-FI1 GmbH & Co. offene Investment KG 094 EUR 10,000 G 9 100.00 Generali Deutschland Pensionskasse AG 100.00 100.00
ENVIVAS Krankenversicherung Aktiengesellschaft 094 EUR 1,022,800 G 2 100.00 Generali Deutschland AG 100.00 100.00
Generali Pensionsfonds AG 094 EUR 5,100,000 G 2 100.00 Generali Deutschland AG 100.00 100.00
Cosmos Lebensversicherungs Aktiengesellschaft 1.49 Cosmos Versicherung Aktiengesellschaft 1.27 ADVOCARD Rechtsschutzversicherung AG
AM Vers Erste Immobilien AG & Co. KG 094 EUR 16,775,749 G 10 100.00 Generali Deutschland Versicherung AG 100.00 100.00
DBB Vermögensverwaltung GmbH & Co. KG 094 EUR 21,214,579 G 10 100.00 Deutsche Bausparkasse Badenia Aktiengesellschaft 100.00 100.00
Generali Deutschland Informatik Services GmbH 094 EUR 15,000,000 G 11 100.00 Generali Deutschland AG 100.00 100.00
FLI Immobilien Verwaltungs SW 13 GmbH 094 EUR 25,000 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
FFDTV Immobilien Verwaltung SW 13 GmbH 094 EUR 25,000 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Generali Pensions- und SicherungsManagement GmbH 094 EUR 25,000 G 11 100.00 Generali Deutschland AG 100.00 100.00
Grundstücksgesellschaft Einkaufszentrum Marienplatz-Galerie Schwerin mbH & Co. KG 094 EUR 14,805,190 G 10 100.00 Generali Deutschland Versicherung AG 100.00 100.00
GID Fonds AVAOT 094 EUR 93,550,926 G 11 100.00 Generali Deutschland Versicherung AG 100.00 100.00
GID Fonds CEAOT 094 EUR 881,586,771 G 11 100.00 Central Krankenversicherung Aktiengesellschaft 100.00 100.00
GID Fonds AMLRET 094 EUR 584,069,884 G 11 100.00 AachenMünchener Lebensversicherung AG 100.00 100.00
GID Fonds GVMET 094 EUR 335,290,255 G 11 100.00 Generali Deutschland Versicherung AG 100.00 100.00
Vofü Fonds I Hamburgische Grundbesitz und Anlage GmbH & Co.KG 094 EUR 14,800,000 G 10 54.19 Generali Deutschland AG 54.19 54.19
GID Fonds AVAOT II 094 EUR 46,641,228 G 11 100.00 Generali Deutschland Versicherung AG 100.00 100.00
GID Fonds GDPRET 094 EUR 169,424,148 G 11 100.00 Generali Deutschland Pensionskasse AG 100.00 100.00
306 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Method(1) Activity(2) Shareholding % Group Equity Ratio(3)Direct Indirect Through Total 26.63 Generali Deutschland Versicherung AG
GID Fonds AVRET 094 EUR 141,818,888 G 11 100.00 Generali Deutschland Versicherung AG 100.00 100.00
Dialog Versicherung Aktiengesellschaft 094 EUR 5,000,000 G 2 100.00 Generali Deutschland AG 100.00 100.00
GIE-Fonds AADMSE 094 EUR 899,236,468 G 11 0.91 Dialog Lebensversicherungs50. 50 AachenMünchener Lebensversicherung AG
GIE-Fonds AASBWA 094 EUR 308,504,359 G 11 1.58 Dialog Lebensversicherungs51. 70 AachenMünchener Lebensversicherung AG
Generali Vie S.A. 029 EUR 336,872,976 G 2 100.00 Generali France S.A. 100.00 98.62
L'Equité S.A. Cie d'Assurances et Réass. contre les risques de toute nature 029 EUR 26,469,320 G 2 99.99 Generali IARD S.A. 99.99 98.62 0.01 Generali Vie S.A.
GFA Caraïbes 029 EUR 6,839,360 G 2 100.00 Generali IARD S.A. 100.00 98.62 307 We, Generali Consolidated Non-Financial Statement
Europ Assistance France S.A. 029 EUR 2,541,712 G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Europ Assistance Océanie S.A.S. 029 XPF 24,000,000 G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Suresnes Immobilier S.A.S. 029 EUR 43,040,000 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI Terra Nova V Montreuil 029 EUR 19,800,000 G 10 30.00 Generali Vie S.A. 100.00 98.62 70.00 Generali IARD S.A.
Immobiliere Commerciale des Indes Orientales IMMOCIO 029 EUR 134,543,500 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI Generali Reaumur 029 EUR 10,643,469 G 10 100.00 Generali Vie S.A. 100.00 98.63
Gconcierges S.A.S. 029 EUR 50,000 G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Sycomore Market Solutions SA 029 EUR 1,000,000 G 11 100.00 Sycomore Factory SAS 100.00 64.80
SCI GRE PAN-EU 74 Rivoli 029 EUR 1,000 G 11 0.10 Generali Europe Income Holding S.A. 100.00 98.92 99.90 GEIH France OPCI
OPPCI K Archives 029 EUR 16,500 G 10 100.00 Generali Europe Income Holding S.A. 100.00 98.92
OPPCI K Charlot 029 EUR 15,300 G 10 100.00 Generali Europe Income Holding S.A. 100.00 98.92 308 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
GRE PANEU Cœur Marais SCI 029 EUR 10,000 G 10 0.10 Generali Europe Income Holding S.A. 100.00 98.92 99.90 OPPCI K Archives
GRE PANEU Fhive SCI 029 EUR 10,000 G 10 0.10 Generali Europe Income Holding S.A. 100.00 98.92 99.90 OPPCI K Charlot
SAS Retail One 029 EUR 18,700,000 G 11 100.00 Retail One Fund SCSp RAIF 100.00 98.92
SCI du 54 Avenue Hoche 029 EUR 152,400 G 10 100.00 Generali IARD S.A. 100.00 98.63
SCI Generali Wagram 029 EUR 284,147 G 10 100.00 Generali IARD S.A. 100.00 98.62
SCI du Coq 029 EUR 12,877,678 G 10 0.81 Generali IARD S.A. 100.00 98.63 99.19 Generali Vie S.A.
SCI Espace Seine-Generali 029 EUR 1,000 G 10 0.10 Generali IARD S.A. 100.00 98.63 99.90 Generali Vie S.A.
SCI GF Pierre 029 EUR 50,719,552 G 10 1.10 Generali IARD S.A. 100.00 98.62 91.55 Generali Vie S.A.
SCI Cogipar 029 EUR 10,000 G 10 0.01 Generali IARD S.A. 100.00 98.62 99.90 Generali Vie S.A.
SC Commerce Paris 029 EUR 1,746,570 G 10 100.00 Generali IARD S.A. 100.00 98.63
Europ Assistance Clearing Center GIE 029 EUR G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
S.C. Generali Carnot 029 EUR 10,525,000 G 10 100.00 Generali Vie S.A. 100.00 98.63
SCI Generali Commerce 1 029 EUR 100,000 G 10 0.10 Generali Vie S.A. 100.00 98.62 53.80 SCI GF Pierre 46.10 SC Commerce Paris
SCI Generali Commerce 2 029 EUR 100,000 G 10 0.06 Generali IARD S.A. 100.00 98.63 99.94 Generali Vie S.A.
SCI Generali le Moncey 029 EUR 1,923,007 G 10 100.00 Generali IARD S.A. 100.00 98.63
SCI Iris La Défense 029 EUR 1,350 G 10 44.44 Generali IARD S.A. 100.00 98.62 309 We, Generali Consolidated Non-Financial Statement
Method(1) Activity(2) Shareholding % Group Equity Ratio(3)Direct Indirect Through Total 55.56 Generali Vie S.A.
Sarl Parcolog Lyon Isle d'Abeau Gestion 029 EUR 8,156 G 10 100.00 PARCOLOG FRANCE 100.00 99.45
SCI Parcolog Isle D'Abeau 3 029 EUR 4,008,000 G 10 40.00 SC Generali Logistique 40.00 39.78
SCI Parcolog Bordeaux Cestas 029 EUR 9,508,000 G 10 100.00 SC Generali Logistique 100.00 99.04
SCI Parcolog Messageries 029 EUR 1,000 G 10 1.00 Generali Vie S.A. 100.00 99.04 99.00 SC Generali Logistique
SCI Thiers Lyon 029 EUR 1,000 G 10 40.00 Generali Vie S.A. 100.00 98.62 60.00 SCI GF Pierre
SAS Parcolog Lille Henin Beaumont 1 029 EUR 302,845 G 10 100.00 OPCI Parcolog Invest 100.00 98.62
OPCI Generali Bureaux 029 EUR 103,996,539 G 10 100.00 Generali Vie S.A. 100.00 98.62
OPCI Generali Residentiel 029 EUR 149,607,800 G 10 100.00 Generali Vie S.A. 100.00 98.62
OPCI GB1 029 EUR 153,698,740 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI 18-20 Paix 029 EUR 20,207,750 G 10 100.00 Generali Vie S.A. 100.00 98.63
SCI Berges de Seine 029 EUR 6,975,233 G 10 100.00 Generali Vie S.A. 100.00 98.63
SCI 6 Messine 029 EUR 9,631,000 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI 204 Pereire 029 EUR 4,480,800 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI 5/7 Moncey 029 EUR 13,263,396 G 10 100.00 Generali Vie S.A. 100.00 98.62
SCI 28 Cours Albert 1er 029 EUR 10,565,945 G 10 100.00 Generali Vie S.A. 100.00 98.62
Europäische Reiseversicherung Aktiengesellschaft 008 EUR 730,000 G 2 74.99 Generali Versicherung AG 74.99 74.95
Generali Beteiligungs- und Vermögensverwaltung GmbH 008 EUR 35,000 G 11 100.00 Generali Beteiligungsverwaltung GmbH 100.00 99.95
Allgemeine Immobilien-Verwaltungs GmbH & Co. KG 008 EUR 17,441,553 G 10 100.00 Generali Versicherung AG 100.00 99.95
Generali Immobilien GmbH 008 EUR 4,900,000 G 10 100.00 Generali Versicherung AG 100.00 99.95 32.50 Generali Participations Netherlands N.V.
Generali Leasing GmbH 008 EUR 730,000 G 11 100.00 Generali Versicherung AG 100.00 99.95
Care Consult Versicherungsmakler GmbH 008 EUR 138,078 G 11 100.00 Europäische Reiseversicherung Aktiengesellschaft 100.00 74.95 3 Banken-Generali-GLStock 008 EUR 4,680 G 11 100.00 Generali Versicherung AG 100.00 99.95 3 Banken Generali GLBond Spezialfonds 008 EUR 90 G 11 100.00 Generali Versicherung AG 100.00 99.95 3 Banken-Generali-GSBond 008 EUR 3,650 G 11 100.00 Generali Versicherung AG 100.00 99.95 3 Banken-Generali - GEN4A Spezialfonds 008 EUR 21,935 G 11 100.00 Generali Versicherung AG 100.00 99.95
BAWAG PSK Spezial 6 008 EUR 15,130 G 11 100.00 BAWAG P.S.K. Versicherung AG 100.00 74.96 3 Banken-Generali - GNLStock 008 EUR 1,248,500 G 11 100.00 Generali Versicherung AG 100.00 99.95 3 Banken-Generali-GHStock 008 EUR 313,061 G 11 100.00 Generali Versicherung AG 100.00 99.95
Generali North American Holding 2 S.A. 092 USD 7,312,384 G 11 100.00 Generali Northern America Real Estate Investments GmbH & Co. KG 100.00 99.89 311 We, Generali Consolidated Non-Financial Statement
Generali Europe Income Holding S.A. 092 EUR 1,420,285,318 G 8 4.40 Generali Versicherung AG 100.00 98.92 2.51 BAWAG P.S.K. Versicherung AG
Generali Core High Street Retail Fund 092 EUR 247,500,010 G 10 28.57 Generali Vie S.A. 100.00 99.45
L'Equité S.A. Cie d'Assurances et Réass. contre les risques de toute nature 59.77 Fondo Donizetti
Generali Real Estate Debt Investment Fund S.C.Sp RAIF 092 EUR 248,937,575 G 11 15.50 AachenMünchener Lebensversicherung AG 100.00 99.64
312 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Generali European Real Estate Investments S.A. 092 EUR 154,972,858 G 8 7.98 Generali Versicherung AG 100.00 99.41 19.95 AachenMünchener Lebensversicherung AG
Generali España, S.A. de Seguros y Reaseguros 42.22 Generali Vie S.A.
GLL AMB Generali Cross-Border Property Fund FCP 092 EUR 69,827,903 G 9 53.85 AachenMünchener Lebensversicherung AG 100.00 100.00
BG Fund Management Luxembourg S.A. 092 EUR 2,000,000 G 11 100.00 Banca Generali S.p.A. 100.00 50.68
Generali Real Estate Asset Repositioning S.A. 092 EUR 213,334,579 G 11 5.35
Method(1) Activity(2) Shareholding % Group Equity Ratio(3)Direct Indirect Through Total 28.90 Generali Participations Netherlands N.V.
Generali España, S.A. de Seguros y Reaseguros 067 EUR 60,925,401 G 2 95.24
Grupo Generali España, A.I.E. 067 EUR 35,599,000 G 11 99.97 Generali España, S.A. de Seguros y Reaseguros 100.00 99.90
Preciados 9 Desarrollos Urbanos SL 067 EUR 3,032 G 10 100.00 Generali Europe Income Holding S.A. 100.00 98.92
GRE PAN-EU Madrid 2 SL 067 EUR 3,000 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Generali Vida Companhia de Seguros S.A. 055 EUR 14,000,000 G 2 86.60 99.99 99.99 13.39 Generali Companhia de Seguros, S.A.
Generali Companhia de Seguros, S.A. 055 EUR 73,000,000 G 2 100.00 100.00 100.00
Europ Assistance - Serviços de Assistencia Personalizados S.A. 055 EUR 250,000 G 11 99.98 Europ Assistance S.A. 99.98 99.97
GRE PAN-EU LISBON 1 055 EUR G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Ponte Alta, SGPS, Unipessoal, Lda. 055 EUR 400,000 G 11 100.00 Europ Assistance S.A. 100.00 99.99
Europ Assistance Services S.A. 009 EUR 186,000 G 11 100.00 Europ Assistance S.A. 100.00 99.99
GRE PAN-EU Brussels 2 S.A. 009 EUR 3,671,500 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92 11.21 Generali Beteiligungs-GmbH
Generali Asia N.V. 050 EUR 250,000 G 4 100.00 Generali Participations Netherlands N.V. 100.00 99.85
Saxon Land B.V. 050 EUR 15,576 G 10 30.00 Generali Deutschland AG 100.00 99.59 30.00 Generali Vie S.A.
Generali Financial Holding FCP-FIS - Sub49. 00 Generali CEE Holding B.V.
Lumyna Investments Limited 031 USD 5,000,000 G 9 100.00 Generali Investments Holding S.p.A. 100.00 99.53
Generali Saxon Land Development Company Ltd 031 GBP 250,000 G 8 30.00 Generali Deutschland AG 100.00 99.59 30.00 Generali Vie S.A.
Købmagergade 39 ApS 021 EUR 50,000 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Generali Hellas Insurance Company S.A. 032 EUR 22,776,198 G 2 100.00 100.00 100.00
Europ Assistance Magyarorszag Kft 077 HUF 24,000,000 G 11 74.00 Europ Assistance Holding S.A.S. 100.00 100.00 26.00 Generali Biztosító Zrt.
Europ Assistance s.r.o. 275 CZK 3,866,666 G 11 25.00 Generali Česká pojišťovna a.s. 100.00 100.00 75.00 Europ Assistance Holding S.A.S.
Generali Velký Špalíček s.r.o. 275 CZK 1,800,000 G 10 100.00 Generali Immobilien GmbH 100.00 99.95
ČP Distribuce a.s 275 CZK 2,000,000 G 10 100.00 Generali Česká pojišťovna a.s. 100.00 100.00
GRE PAN-EU Prague 1 s.r.o. 275 EUR 1,000 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Direct Care s.r.o. 275 CZK 1,000,000 G 11 100.00 Generali Česká pojišťovna a.s. 100.00 100.00
Pařížská 26, s.r.o. 275 CZK 200,000 G 10 100.00 Generali Česká pojišťovna a.s. 100.00 100.00 316 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Small GREF a.s. 275 CZK 198,000,000 G 10 21.21 Generali Česká pojišťovna a.s. 100.00 100.00 18.18 Generali Biztosító Zrt.
Generali Życie Towarzystwo Ubezpieczeń Spółka Akcyjna 20.71 Generali Poisťovňa, a. s.
I.J.O. Prague Investments s.r.o. 275 CZK 1,000 G 11 100.00 Generali Real Estate Asset Repositioning S.A. 100.00 99.35
Generali Česká pojišťovna a.s. 275 CZK 4,000,000,000 G 2 100.00 CZI Holdings N.V. 100.00 100.00
Česká pojišt'ovna ZDRAVÍ a.s. 275 CZK 105,000,000 G 2 100.00 Generali Česká pojišťovna a.s. 100.00 100.00
Generali Distribuce a.s. 275 CZK 3,000,000 G 11 100.00 Generali Česká pojišťovna a.s. 100.00 100.00
Acredité s.r.o. 275 CZK 100,000 G 11 100.00 Generali Česká pojišťovna a.s. 100.00 100.00
Generali Real Estate Fund CEE a.s., investiční fond 275 CZK 487,000,000 G 9 18.89 GP Reinsurance EAD 100.00 100.00 24.23 Small GREF a.s.
Solitaire Real Estate, a.s. 275 CZK 128,296,000 G 10 100.00 Generali Real Estate Fund CEE a.s., investiční fond 100.00 100.00
Generali Towarzystwo Ubezpieczeń Spółka Akcyjna 054 PLN 191,000,000 G 2 100.00 Generali CEE Holding B.V. 100.00 100.00
Generali Investments Towarzystwo Funduszy Inwestycyjnych S.A. 054 PLN 21,687,900 G 8 100.00 Generali CEE Holding B.V. 100.00 100.00
Plac M GP Spółka Z Ograniczoną Odpowiedzialnością 054 EUR 1,572 G 11 100.00 Generali Europe Income Holding S.A. 100.00 98.92
Generali Powszechne Towarzystwo Emerytalne S.A. 054 PLN 78,000,000 G 11 100.00
SIBSEN Invest sp. z o.o. 054 PLN 16,764,000 G 11 100.00 Generali Real Estate Fund CEE a.s., investiční fond 100.00 100.00
Generali zavarovalnica d.d. Ljubljana 260 EUR 39,520,356 G 2 100.00 Generali CEE Holding B.V. 100.00 100.00
Generali Investments, družba za upravljanje, d.o.o. 260 EUR 1,767,668 G 8 100.00 Adriatic Slovenica Zavarovalna družba d.d. 100.00 100.00
Generali Societate de Administrare a Fondurilor de Pensii Private S.A. 061 RON 67,000,000 G 11 99.99 Generali CEE Holding B.V. 100.00 100.00
Generali Assurances Générales SA 071 CHF 27,342,400 G 3 99.98 Generali (Schweiz) Holding AG 99.98 99.95
Generali Personenversicherungen AG 071 CHF 106,886,890 G 3 15.06 Generali Assurances Générales SA 100.00 99.96 84.94 Generali (Schweiz) Holding AG
Europ Assistance (Suisse) S.A. 071 CHF 200,000 G 11 100.00 Europ Assistance (Suisse) Holding S.A. 100.00 70.00
Europ Assistance (Suisse) Assurances S.A. 071 CHF 3,000,000 G 3 100.00 Europ Assistance (Suisse) Holding S.A. 100.00 70.00
318 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Fortuna Lebens-Versicherungs AG 090 CHF 10,000,000 G 3 100.00 Generali (Schweiz) Holding AG 100.00 99.97
Europ Assistance Yardım ve Destek Hizmetleri Ticaret Anonim Şirketi 076 TRY 1,804,000 G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Akcionarsko društvo za osiguranje Generali Osiguranje Srbija, Beograd 289 RSD 2,131,997,310 G 3 0.05 GP Reinsurance EAD 100.00 100.00 99.95 Generali CEE Holding B.V.
GMMI, Inc. 069 USD 400,610 G 11 100.00 Europ Assistance North America, Inc. 100.00 99.99
CareLinx Inc. 069 USD 29,677,149 G 11 80.79 Europ Assistance North America, Inc. 80.79 80.78
Trip Mate, Inc. 069 USD 1,844,773 G 11 100.00 Europ Assistance North America, Inc. 100.00 99.99
General Securities Corporation of North America 069 USD 364,597 G 9 1.00 Generali North American Holding 1 S.A. 100.00 99.48 1.00 Generali North American Holding 2 S.A.
Generali Consulting Solutions LLC 069 USD 1,000,000 G 11 100.00 100.00 100.00
Europ Assistance Argentina S.A. 006 ARS 69,037,352 G 11 43.91 Caja de Seguros S.A. 100.00 95.63 56.09 Ponte Alta, SGPS, Unipessoal, Lda.
Caja de Ahorro y Seguro S.A. 006 ARS 269,000,000 G 4 62.50 90.00 89.96 27.50 Genirland Limited
Ritenere S.A. 006 ARS 530,000 G 11 2.85 Caja de Seguros S.A. 100.00 89.96 97.15 Caja de Ahorro y Seguro S.A.
Europ Servicios S.p.A. 015 CLP 1,037,476 G 11 100.00 Europ Assistance SA 100.00 50.96
Europ Assistance SA 015 CLP 740,895,029 G 11 25.48 Europ Assistance Holding S.A.S. 50.96 50.96 25.48 Ponte Alta, SGPS, Unipessoal, Lda.
Generali Ecuador Compañía de Seguros S.A. 024 USD 8,000,000 G 3 52.45 52.45 52.45
Europ Assistance Pacifique 253 XPF 10,000,000 G 11 75.00 Europ Assistance Holding S.A.S. 75.00 75.00
PT Generali Services Indonesia 129 IDR 11,376,454 G 10 1.00 Generali IARD S.A. 100.00 98.62 99.00 Generali Vie S.A.
Generali Life Assurance Philippines, Inc. 027 PHP 2,521,260,600 G 3 100.00 Generali Asia N.V. 100.00 99.85
Generali Insurance (Thailand) Public Co. Ltd 072 THB 1,492,000,000 G 3 48.93 Generali Asia N.V. 89.95 87.75 41.02 KAG Holding Company Ltd
KAG Holding Company Ltd 072 THB 2,270,873,000 G 4 5.77 Generali Asia N.V. 100.00 94.82 94.22 IWF Holding Company Ltd
The percentage of consolidation in each subsidiaries consolidated line by line is 100%.
(1) Consolidation Method: Line-by-line consolidation method =G, Proportionate consolidation method = P, Line-by-line consolidation method arising from joint management = U
DWP Partnership 072 THB 200,000 G 4 50.00 FTW Company Limited 100.00 90.43 50.00 MGD Company Limited
Generali Vietnam Life Insurance Limited Liability Company 062 VND 5,252,600,000,000 G 3 100.00 100.00 100.00
Europ Assistance India Private Ltd 114 INR 296,540,000 G 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Generali China Assets Management Company Co. Ltd 016 CNY 200,000,000 G 9 80.00 Generali China Life Insurance Co. Ltd 80.00 40.00
Generali Services Pte. Ltd. 147 SGD 335,770 G 11 100.00 Generali Asia N.V. 100.00 99.85
Generali Financial Asia Limited 103 HKD 226,240,000 G 9 100.00 100.00 100.00
Initium S.r.l. in liquidazione (*) 086 EUR 250,000 b 10 49.00 Generali Italia S.p.A. 49.00 49.00
Finagen S.p.A. Società in liquidazione 086 EUR 6,700,000 a 8 0.10 Generali Italia S.p.A. 100.00 100.00 3,341 99.90 Alleanza Assicurazioni S.p.A.
Urbe Retail Real Estate S.r.l. 086 EUR 100,000 b 11 100.00 Generali Real Estate S.p.A. SGR 100.00 100.00
BG Saxo SIM S.p.A. (*) 086 EUR 5,000,000 c 8 19.90 Banca Generali S.p.A. 19.90 10.08 2,792 3.57 Alleanza Assicurazioni S.p.A.
CityLife Sviluppo 5 S.r.l. 086 EUR 10,000 a 10 100.00 Generali Real Estate S.p.A. SGR 100.00 100.00 318
Fondo Yielding (*) 086 EUR 248,079,480 b 11 45.00 Generali Europe Income Holding S.A. 45.00 44.51 120,000
Arte Generali GmbH 094 EUR 25,000 a 11 100.00 Generali Deutschland AG 100.00 100.00 2,625
Generali – The Human Safety Net – Deutschland gemeinnützige GmbH 094 EUR 25,000 a 11 100.00 Generali Deutschland AG 100.00 100.00 29 322 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Generali Deutschland Immobilien Verwaltungs GmbH 094 EUR 35,000 a 10 100.00 Generali Real Estate S.p.A. 100.00 100.00 35
Zweite AM RE Verwaltungs GmbH 094 EUR 25,000 a 9 100.00 Generali Deutschland Versicherung AG 100.00 100.00 25
Generali Akademie GmbH i.L. 094 EUR 25,600 a 11 100.00 Generali Deutschland Versicherung AG 100.00 100.00
AVW Versicherungsmakler GmbH 094 EUR 1,550,000 b 11 26.00 Dialog Versicherung Aktiengesellschaft 26.00 26.00 2,232
GLL AMB Generali Properties Fund I GmbH & Co. KG 094 EUR 580,210 a 11 99.99
GLL AMB Generali 200 State Street 094 EUR 10,044,506 a 11 99.50 GLL AMB Generali Cross-Border Property Fund FCP 99.50 99.50 10,045
Trieste Courtage S.A. 029 EUR 39,000 a 11 99.89 Generali France S.A. 99.96 98.59 39
PMC Treize Montluçon S.A.S. 029 EUR 3,371,730 a 9 79.21 Generali France S.A. 100.00 98.63 4,968 20.79 Cofifo S.A.S.
EAP France SAS (*) 029 EUR 100,000 c 11 50.10 Europ Assistance France S.A. 50.10 50.10 858
ABT SAS 029 EUR 125,000 c 11 25.00 Generali France S.A. 25.00 24.66 16
Reunion Aerienne & Spatiale SAS 029 EUR 999,999 c 11 33.33 Generali IARD S.A. 33.33 32.87
SAP BEA 029 EUR 10,000 c 11 100.00 Bien Être Assistance S.A.S. 100.00 50.10
SAS 100 CE (*) 029 EUR 49,967,080 c 10 50.00 Generali Europe Income Holding S.A. 50.00 49.46 18,880
Human Safety Net France 029 EUR a 11 100.00 Generali France S.A. 100.00 98.63
SCI Daumesnil (*) 029 EUR 16,753,270 c 10 50.00 Generali IARD S.A. 50.00 49.31 20,193 324 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
SCI Malesherbes (*) 029 EUR 32,930,674 c 10 50.00 Generali Vie S.A. 50.00 49.31 23,152
Lead Equities II. Auslandsbeteiligungs AG 008 EUR 730,000 b 9 21.59 Generali Versicherung AG 21.59 21.58
Lead Equities II. Private Equity Mittelstandsfinanzierungs AG 008 EUR 7,300,000 b 9 21.59 Generali Versicherung AG 21.59 21.58
Bonus Pensionskassen AG (*) 008 EUR 5,087,098 b 11 50.00 Generali Versicherung AG 50.00 49.97 24,887
Sansa Beteiligungsverwaltungs GmbH 008 EUR 40,000 a 11 100.00 Generali Real Estate S.p.A. 100.00 100.00
Europ Assistance Austria Holding GmbH 008 EUR 35,000 a 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99 35
Generali Betriebsrestaurants-GmbH 008 EUR 36,336 a 11 100.00 Generali Versicherung AG 100.00 99.95 484
Point Partners GP Holdco S.à r.l. (*) 092 EUR 25,000 b 11 25.00 Generali European Retail Investments Holdings S.A. 25.00 24.85
Generali Core+ Fund GP 092 EUR 100 a 11 100.00 Generali Real Estate S.p.A. 100.00 100.00
Ioca Entertainment Limited (*) 031 GBP 10,000 b 11 35.00 Banca Generali S.p.A. 35.00 17.74
Europ Assistance A/S 021 DKK 500,000 a 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Europ Assistance Service Greece Single Member Private Company 032 EUR 50,000 a 11 100.00 Europ Assistance Holding S.A.S. 100.00 99.99
Top Torony Zrt. (*) 077 HUF 100,064,644 c 11 50.00 GLL AMB Generali Bankcenter S.à.r.l. 50.00 50.00 56,028
Nadace GCP 275 CZK 1,000,000 a 11 100.00 Generali Česká pojišťovna a.s. 100.00 100.00 137
GSL Services s.r.o. 276 EUR 6,639 a 11 100.00 Generali Poisťovňa, a. s. 100.00 100.00 7
Concordia Innowacje Sp. Z o.o. 054 PLN 50,000 a 11 100.00 Concordia Polska Towarzystwo Ubezpieczeń Wzajemnych 100.00 99.76
IDORU Inteligentni Analiticni Sistemi d.o.o. 260 EUR 7,500 b 11 15.00
Generali Investments, družba za upravljanje, d.o.o. 100.00 100.00 8 67.75 Agricola San Giorgio S.p.A.
Genagricola Foreste S.r.l. 061 RON 56,500,000 a 11 100.00 S.C. Genagricola Romania S.r.l. 100.00 100.00
Generali Investments, d.o.o. za upravljanje investicijskim fondovima 261 HRK 4,148,000 a 11 91.54
House of InsurTech Switzerland AG 071 CHF 100,000 a 11 100.00 Generali (Schweiz) Holding AG 100.00 99.97
Generali Investments AD Skopje 278 MKD 695,000 a 11 94.60 Generali Investments, družba za upravljanje, d.o.o. 94.60 94.60 450
Ineba S.A. 006 ARS 4,000,000 b 11 48.00 Caja de Ahorro y Seguro S.A. 48.00 43.18 623 326 Generali Group Annual Integrated Report and Consolidated Financial Statements 2019
Europ Assistance Brasil Serviços de Assistência S.A. (*) 011 BRL 72,664,474 c 11 100.00
Europ Assistance Thailand Company Limited 072 THB 200,000 c 3 48.95 Europ Assistance Holding S.A.S. 49.00 49.00 3
MPI Generali Insurans Berhad (*) 106 MYR 100,000,000 b 3 49.00 Generali Asia N.V. 49.00 48.92 85,399
Future Generali India Life Insurance Company Ltd (*) 114 INR 19,358,206,090 c 3 49.00
Future Generali India Insurance Company Ltd (*) 114 INR 9,048,037,050 c 3 49.00
Sprint Advisory Services Private Limited (*) 114 INR 5,964,123,950 c 4 47.96
Shendra Advisory Services Private Limited (*) 114 INR 2,710,323,220 c 4 47.96
Generali China Insurance Co. Ltd (*) 016 CNY 1,300,000,000 b 3 49.00 49.00 49.00 54,445
Attestation of the Consolidated Financial Statements pursuant to art. 154-bis, paragraph 5, of legislative decree of 24 February 1998, no. 58 and art. 81-ter of Consob regulation of 14 May 1999, no. 11971 as amended 1. The undersigned, Philippe Donnet, in his capacity as Managing Director and Group CEO, and Cristiano Borean, in his capacity as Manager in charge of preparing the financial reports of Assicurazioni Generali S.p.A. and Group CFO, having also taken into account the provisions of Art 154-bis, paragraphs 3 and 4, of the Italian Legislative Decree No. 58 dated 24 February 1998, hereby certify: - the adequacy in relation to the characteristics of the Company and - the effective implementation of the administrative and accounting procedures for the preparation of the consolidated financial statements over the course of the period from 1 January to 31 December 2019.
3. The undersigned further confirm that: 3.1 the consolidated financial statements as at 31 December 2019: a) are prepared in compliance with applicable international accounting standards recognized by the European Community pursuant to Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002, with the provisions of Legislative Decree No. 38 of 28 February 2005, of the Italian Civil Code, of Legislative Decree No. 209 of 7 September 2005 and with applicable provisions, regulations and circular letters issued by ISVAP (now IVASS); b) correspond to the related books and accounting records; c) provide a true and fair representation of the financial position of the issuer and the group of companies included in the scope of consolidation; 3.2 the management report contains a reliable analysis of the business outlook and management result, the financial position of the issuer and group companies included in the scope of consolidation and a description of the main risks and uncertain situations to which they are exposed.
Philippe Donnet Cristiano Borean Managing Director and Group CEO Manager in charge of preparing the Company’s financial reports and Group CFO
Shareholders, in compliance with s. 153 of Lgs.Decree 24 February 1998, no. 58 (“CFBA”, [consolidated law on financial intermediation]) and with Consob communication no. 1025564 of 6 April 2001 and subsequent amendments and additions, and taking account of the recommendations of the Italian National Board of Accountants and Auditors (“CNDCEC”), the Board of Statutory Auditors of Assicurazioni Generali S.p.A. (the “Company” or the “Parent”) sets out herewith its Report on the supervisory activities carried out during financial year 2019. (the “Company” or the “Parent”) sets out herewith its Report on the supervisory activities carried out during financial year 2019.
The Board of Statutory Auditors (BSA) performed the activities falling within its remit during the 2019 financial year by holding 25 meetings, with an average duration of approximately two hours and twenty minutes. The BSA also: – attended the 14 meetings of the Board of Directors; – attended the 14 meetings of the Risk and Control Committee (“RCC”); – attended the 3 meetings of the Related-Party Transactions Committee (“RPTC”); – attended, in the person of its Chairman and/or another statutory auditor, the 11 meetings of the Appointments and Remuneration Committee (“ARC”), with specific reference to remuneration matters; – attended, in the person of its Chairman and/or another statutory auditor, the 13 meetings of the Investments and Strategic Transactions Committee (ISTC) (of which 4 of the former Investments Committee); – attended, in the person of its Chairman and/or another statutory auditor, the 7 meetings of the Corporate Governance and Social and Environmental Sustainability Committee (“GSC”).
its capacity as internal control and account audit committee, held regular meetings with the external auditors EY S.p.A. (“EY”), during which data and information of significance for the performance of the bodies’ respective responsibilities were exchanged.
The BSA monitored compliance by the Company with the legislation and the Articles of Association and observance of the principles of correct administration, with special reference to transactions having a significant impact on the economic, financial and assets position, by regularly attending meetings of the Board of Directors and examining the documentation provided. In this context, the BSA received information from the Managing Director/Group CEO and the Board of Directors about activities performed and transactions with a significant impact on results of operations and financial position conducted by the Company, including transactions conducted through directly or indirectly controlled companies. On the basis of the information provided, the BSA reasonably concludes that the said transactions can be deemed to comply with the legislation, the Articles of Association and principles of sound management and that they do not appear to be manifestly imprudent, rash or in conflict with the resolutions passed by the General Meeting, or such as to prejudice the integrity of the Company ’s assets. In particular, the BSA was informed about transactions in which Directors declared an interest, on their own account or on behalf of third parties, and has no comments to make about the compliance of the corresponding resolutions with the legislation and regulations.
The most significant events involving the Company and the Group in 2019 and the early months of 2020 are also described in the 2019 Integrated Annual Report and Consolidated Financial Statements. They include the following events: January – as part of the strategy to optimise the Group’s geographical presence and improve operating efficiency and capital allocation, the sale of the equity investment held in Generali Belgium SA was completed; – a ten-year subordinated bond was issued for an overall amount of 500 million euro, for institutional investors. The bond, which qualifies as “Tier 2” regulatory capital, was intended to partially refinance 750 million euro of Group subordinated debt callable in 2019, an early repayment which, as required by law, obtained prior IVASS authorisation; – the early repayment option was exercised on the following perpetual subordinated notes: 7.236% Perpetual Fixed/Floating Rate Notes, for an amount of 350 million (early repayment date 4 March 2019) and 8.5% Perpetual Fixed/Floating Rate Notes, for an amount of 350 million (early repayment date 6 March 2019); – on 30 January 2019, the Board of Directors approved amendments to align the Articles of Association with IVASS Regulation no. 38/2018 concerning the composition of the Executive Committee. Specifically, the amendments provide that the Chair of the Board of Directors may no longer be a member of the Executive Committee, in accordance with the IVASS Regulation under which, in insurance companies and for Italian ultimate controlling institutional units to which the socalled reinforced regime applies (of which Assicurazioni Generali S.p.A. is one), the Chair cannot have an executive role; February – the acquisition of a majority holding in Sycomore Factory SAS was completed; the purchase began in September 2018, as part of the Company’s asset management strategy; – the acquisition of the Slovenian insurance company Adriatic Slovenica and its subsidiaries was completed; March – in the wake of an agreement signed in July 2018, the Company completed the sale of its entire equity investment in Generali Worldwide Insurance Company Limited, based in Guernsey, and of its equity investment in Generali Link Limited, of which it held 100% of share capital; – the launch was announced of Axis Retail Partners, a new real estate boutique that invests in shopping malls, as part of the Company strategy to expand its presence in real estate;
The Company has introduced “Related-Party Transaction Procedures” (“RPT Procedures”), adopted in compliance with Consob Regulation 17221/2010, as amended, and s. 2391-bis of the Italian Civil Code, which are also applicable to transactions performed by subsidiaries. The Board of Statutory Auditors believes that the above procedures comply with Consob Regulation 17221/2010, as amended; during the year it monitored the Company’s compliance with the procedures. Assicurazioni Generali S.p.A.’s 2019 Annual Financial Statements and the 2019 Integrated Annual Report and Consolidated Financial Statements illustrate the economic and asset-related effects of the related-party transactions, and describe the most significant relationships.
The organisational structure of the Company and the Group and its developments are described in detail in the Corporate Governance and Share Ownership Report. The Company’s organisational structure covers the duties and responsibilities of the corporate functions, the hierarchical and functional relations among them and related coordination mechanisms. It is a two-tier structure based on Group Head Office (“GHO”) and the Business Units. GHO provides strategic guidance and coordinates the 6 Business Units, which enhance entrepreneurship and local autonomy through the geographical areas and the global lines. Organisational governance is achieved through the fol-
During 2019 a sustainability management committee was set up, to guarantee a consistent approach to integrating sustainability into the core business among all Group Head Office functions and the Business Units, by identifying risks and opportunities and monitoring progress and results. In April 2019, the position of Group Chief Digital Officer was created, reporting directly to the General Manager; this officer is responsible for overseeing, controlling and supporting Group digital and data analytics initiatives and for overseeing coordinating innovation at Group level.
The Corporate Governance and Share Ownership Report and the Group Risk Report (included in the 2019 Integrated Annual Report and Consolidated Financial Statements ) describe the main characteristics of the internal control and risk management system.
The internal control and risk management system (“ICRMS”) consists of the rules, procedures and corporate units that – also with regard to the Company’s role as the parent of an insurance group – operate to enable the Company and Group to function effectively and to identify, manage and monitor the main risks to which they are exposed. The ICRMS is an integrated system involving the whole organisational structure: the governing bodies and the corporate units, including the control functions, are required to contribute in a coordinated and interdependent manner to its operation.
indicated in the IVASS letter to the market of 5 July 2018. Elements implied by the model include: the non-executive role of the Chair of the Board of Directors, the existence of the Control & Risks Committee and of a remuneration committee, the effective and efficient operation of the Fundamental Functions performed by specific organisational units (separate from the operating functions and not outsourced), headed by individuals with adequate skills and qualifications. The Group Audit, Group Compliance, Group Risk Management and Group Actuarial Functions are the Fundamental Functions pursuant to IVASS Regulation no. 38/2018. To guarantee a consistent Group approach, the Company formulates Group directives on the governance system integrated with Group internal control and risk management policies, which apply to all the companies.
The ICRMS has been drawn up in accordance with Solvency II – including EIOPA delegated acts and guidelines – and with national laws and regulations that enact Solvency II. Following the issue by the Regulator of authorisation to use a “Partial Internal Model” (“PIM”) to calculate the Solvency Capital Requirement (“SCR”) as required by Solvency II, the Group is allowed to use the PIM to determine the SCR of the Group and the main Business Units for the Italian, German, French, Czech, Austrian, Swiss and, from November 2019, Spanish companies. For further details, see the Group Risk Report.
The Board of Statutory Auditors constantly monitored the alignment of the Company and Group governance structure to IVASS Regulation no. 38/2018.
The Board of Statutory Auditors also continued to monitor implementation of the plan of initiatives to mitigate the risk of money-laundering and financing of terrorism, taking account of the annual self-assessment based on specific methodologies indicated by IVASS. After the issue of IVASS Regulation no. 44/2019 on organisation, procedures, internal controls and verification of clients in relation to the risk of money-laundering and financing of terrorism, during 2019 the Company began implementing the relevant regulatory dispositions, also through the introduction of the new Group Guideline “AML/CTF Risk-Based Approach”. The new guidelines, whose drafting was monitored by the Board of Statutory Auditors during the regular meetings with the relevant functions, focus specifically on closer coordination and monitoring of Group companies, Group-wide sharing of client data, uniformity of client profiling, creation of new information flows and tighter monitoring of suspicious transactions. During 2019, the anti-money laundering area underwent specific inspections by the Group Audit Function, which substantially verified the adequacy of the control system. Looking forward, the new requirements under IVASS Regulation no. 44/2019 provide for the Group database to be implemented as from 1 January 2020. Here, the “Group Data Sharing” project has been launched and is expected to be completed in 2020; the objective is to achieve greater uniformity in the approach to risk management among Group companies.
Also with regard to anti-money laundering, during 2019 IVASS conducted an inspection of the Company and the Italian subsidiaries in the “Life” business; the inspection was completed on 20 December 2019 and the report on the findings is pending. Through meetings and discussions with the function concerned and attendance at RCC and Board of Directors meetings, the Board of Statutory Auditors was kept constantly informed about the requests made by IVASS and the replies of the Company offices.
In the light of all the above information and taking the dynamic nature of the ICRMS into account, no factors emerged from the analyses conducted or the information obtained that could lead this BSA to consider the Company ’s internal control and risk management system not fit for purpose as a whole.
In addition to the matters described above, the Board of Statutory Auditors performed further specific periodic checks in accordance with the statutory and regulatory provisions applicable to the insurance industry. Specifically, in part through its attendance at meetings of the RCC, the Board of Statutory Auditors: – verified compliance with the investment policy guidelines approved by the Board of Directors, pursuant to s. 8 IVASS Regulation no. 24 of 6 June 2016; – checked that transactions in derivative financial instruments complied with the guidelines and limitations issued by the Board of Directors, and checked that the Company had duly issued the periodic communications to IVASS; – analysed the administrative procedures adopted for the handling, safekeeping and accounting of financial instruments, and checked the instructions issued to depositaries regarding periodic despatch of statements of account with suitable indications of any encumbrances; – checked that the assets covering the technical reserves were free of encumbrances and fully available; – ascertained correspondence with the register of assets destined to cover the technical reserves.
8. Ratification of the Corporate Governance Code, Composition of the Board of Directors, and remuneration (point 17 of Consob Notice no. 1025564/01)
Statutory Auditors and the candidates for the position of auditor with an overview of the activities that the Board of Statutory Auditors is called upon to perform, so that the necessary professional skills and the adequacy of the remuneration proposed for performance of the engagement may be properly assessed.
The Board of Statutory Auditors also verified the correct application of the criteria and process established by the Board of Directors to assess the independence of directors classed as “independent”; it also ascertained that its own independence requirements were met, and informed the Board of Directors of its findings as required by the Corporate Governance Code. In light of the Company policies and operating guidelines, the Board of Directors conducted its own assessment as to whether the independence requirement was met, on the basis of all the information available to the Company and specific supplementary declarations designed to obtain from self-declared independent Directors precise information about the existence of any commercial, financial or professional relationships, self-employment or employment relations or relationships of a financial or professional nature, that are of significance under the Corporate Governance Code and the CFBA.
On 31 March 2020, EY provided the Board of Statutory Auditors, in its capacity as Internal Control and Audit
As noted above, the statutory audit engagement currently performed by EY S.p.A. will expire with the approval of the Company financial statements as at and for the year ended 31 December 2020. As observed in the Report on financial year 2018, the selection of the new external auditor has already taken place and was concluded with the shareholder resolution of 7 May 2019 approving the assignment of the audit engagement for the nine years 2021-2029 to KPMG S.p.A. The resolution was carried on the basis of the recommendation drawn up by the Board of Statutory Auditors pursuant to s. 16.2 of EU Regulation no. 537/2014 and approved at a BSA meeting on 4 March 2019.
11. Complaints pursuant to s. 2408 of the Italian Civil Code. Omissions, censurable facts or irregularities found (points 5, 6 and 18 of Consob Notice no. 1025564/01)
Subsequently, in a letter dated 30 March 2020, IVASS also requested that, when examining the 2019 financial statements and in light of the situation created by COVID -19, insurance companies and Italian ultimate controlling institutional units “adopt individually and at group level extreme caution in the distribution of dividends and other assets and in the payment of the variable remuneration component to corporate managers.” The Board of Statutory Auditors was immediately informed about and took due note of the IVASS letter and, as required by the Regulator, through this report calls the attention of the shareholders to the question in view of the forthcoming General Meeting. Lastly, on 2 April 2020, EIOPA issued a new statement asking insurance companies to temporarily suspend discretionary distribution of dividends in view of the current climate of uncertainty, specifying that this suspension may be reviewed once the financial and economic impact of COVID-19 becomes clearer. EIOPA also invited insurance companies to adopt a similar prudent approach to variable remuneration of company representatives: in this regard, EIOPA expressed an expectation that companies would review their current remuneration policies to ensure their consistency with prudent planning of capital and the current economic scenario. In this context, according to the European Regulator, the variable portion of remuneration should be identified conservatively, and the possibility of its deferral should be taken into consideration.
Independent auditor’s report pursuant to article 14 of Legislative Decree n. 39, dated 27 January 2010, to article 10 of EU Regulation n. 537/2014 and to article 102 of Legislative Decree n. 209, dated 7 September 2005
In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at December 31, 2019, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and the Regulation issued to implement article 90 of Legislative Decree dated 7
Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We identified the following key audit matters: Key Audit Matters Audit Responses
Valuation of goodwill At 31 December 2019, goodwill amounted to Eur 7,180 million. Based on IAS 36 – Impairment of Assets, goodwill is measured at cost less any impairment losses. At least annually, the Group carries out an impairment test, comparing the recoverable amount of each Cash Generating Unit (CGU) to which goodwill was attributed to with the corresponding carrying amount. The recoverable amount is represented by the higher between the fair value and the value in use determined by the Group through the Dividend Discount Model (DDM).
The audit response included several procedures, the most relevant of which are outlined below: · An understanding of the process related to the determination of the fair value and of the related key controls, as well
No active market exists for these investments, so their fair value is determined through methodologies and calculation models with a high level of subjectivity when choosing the assumptions, such as interest rates, yield curves, credit spreads and dividend estimates; therefore, we considered this aspect a key matter for our audit.
as the testing of these controls; · The performance of independent repricing, for a sample of investments, in order to verify the reasonableness of the fair value at year end.
We also involved valuation specialists to assist us in performing our audit procedures. Further, we assessed the adequacy of the disclosures provided in the explanatory notes.
Non-Life technical provisions estimation The technical provisions of the non-life segment, recorded at 31 December 2019 for an amount equal to Eur 31,652 million, are accounted for based on local GAAP applied by the individual insurance companies of the Group in their separate financial statements, since these contracts fall within the scope of the IFRS 4 – Insurance Contracts. In accordance with this standard, no provisions for any future claims were recognised, with the consequent elimination of the equalisation provisions and the additional components of the unearned premiums reserve.
The financial statement information relating to life insurance provisions is disclosed in the explanatory notes in the section “Accounting principles” and in note n. 13.
The audit response included several procedures, the most relevant of which are outlined below: · An understanding of estimation process of life technical provisions designed by the Group and of the related key controls, as well as the testing of these controls; these procedures were carried out with reference to the controls over completeness, accuracy and appropriateness of data related to the insurance portfolio used to calculate the life technical provisions, taking into consideration also the control activities performed by the actuarial function of the Group and the related results; · The evaluation of the appropriateness of the methodologies and the reasonableness of the assumptions used by the Group to perform the Liability Adequacy Test (LAT) with regard to the purposes of the test itself as defined by IFRS 4 and the performance of test of detail on the underlying data, including those referring to “shadow accounting”, DAC and VoBa elements; · The assessment of the compliance of the methodologies used for the attribution to the policyholders of the difference between the carrying value of the basis on which the profit sharing is determined and the corresponding value used to determine the current profit retroceded to the policyholders, in accordance with IFRS 4; · Comparative analyses through the calculation of appropriate indicators observed historically and their correlation with other significant financial statements indicators, as well as the consistency with other financial statements information, the expected values and the results determined in previous financial years;
level, in past years, in many of the countries where the Group operates has led to an increase of additional provisions resulting from the adequacy test.
· The development of an independent range of acceptable values, also through sensitivity analyses, representative of the level of uncertainty in setting the assumptions underlying the estimation of life technical provisions and verifying that these were included in that range.
We also involved actuarial specialists to assist us in performing our audit procedures. Further, we assessed the adequacy of the disclosures provided in the explanatory notes.
Responsibilities of Directors and Those Charged with Governance for the Consolidated Financial Statements The Directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the Regulation issued to implement article 90 of the Legislative Decree dated 7 September 2005, n. 209, and, within the terms provided by the law, for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
· we have obtained sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We have communicated with those charged with governance, identified at an appropriate level as required by ISA Italia, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
From the matters communicated with those charged with governance, we have determined those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We have described these matters in our auditor’s report.
We confirm that the opinion on the consolidated financial statements included in this report is consistent with the content of the additional report to the audit committee (“collegio sindacale”) in their capacity as audit committee, prepared in accordance with article 11 of the EU Regulation n. 537/2014.
Pursuant to article 3, paragraph 10, of Legislative Decree n. 254, dated 30 December 2016, such nonfinancial information is subject to a separate compliance report signed by us.
This report has been translated into the English language solely for the convenience of international readers.
Average duration: it is defined as the average residual economic maturity (considering the first call option date) of the financial debt outstanding as at the reporting date, weighted for the nominal amount.
Capitals: stocks of value as inputs to the business model. They are increased, decreased or transformed through the organization’s business activities and outputs. The capitals are categorized in the International <IR> Framework as: – financial capital: the pool of funds that is available to an organization for use in the production of goods or the provision of services, obtained through financing, such as debt, equity or grants, or generated through operations or investments; – manufactured capital: manufactured physical objects (as distinct from natural physical objects) that are available to an organization for use in the production of goods or the provision of services; – intellectual capital: organizational, knowledge-based intangibles; – human capital: people’s competencies, capabilities and experience, and their motivations to innovate; – social and relationship capital: the institutions and the relationships within and between communities, groups of stakeholders and other networks, and the ability to share information to enhance individual and collective well-being; – natural capital: all renewable and non-renewable environmental resources and processes that provide goods or services that support the past, current or future prosperity of an organization.
Companies of the tar sand sector: companies whose revenues are at least 5% derived from tar sands’ extraction or operators of controversial pipelines dedicated to tar sands’ transportation.
CoR, combined ratio: it is a technical performance indicator of Property & Casualty segment, calculated as the ratio of net insurance benefits and claims as well as administration and acquisition costs to net earned premiums. In other words, it is the sum of loss ratio and expense ratio.
Cost/Income ratio: it is a performance indicator of the Asset Management segment calculated as the ratio of operating expenses to operating revenues.
Digital transformation and cybersecurity: the technological innovations introduced by the fourth industrial revolution, including big data, artificial intelligence, the Internet of Things, automation and blockchain are transforming the economic-production systems and social habits with the spread of services featuring a high level of personalisation and accessibility, which demand new know-how and skills, with a resulting radical transformation of traditional jobs and the appearance of new players on the market. The growth in complexity, interdependence and speed of innovation of the new digital technologies are posing challenges associated with the security of the systems and the IT infrastructure.
Distributor: sales force within traditional distribution networks (exclusive agents, non-exclusive agents and employed sales force permanently involved in the activities of promoting and distributing Generali products).
Employees: all the Group direct people at the end of the period, including managers, employees, sales attendant on payroll and auxiliary staff.
Environmental products: – products designed to promote sustainable transport with reduced environmental impact, including policies that reward responsible driving; – products that support the energy efficiency of buildings; – products for covering the risks connected with the production of renewable energies; – products specifically designed to cover catastrophe risks or specific environmental damage; – products to companies with environmental certifications (e.g. ISO 14001, EMAS, LEED) or adopting safety measures to prevent environmental damages; – anti-pollution products.
Equity investments: direct investments in quoted and unquoted equity instruments, as well as investment funds
that are mainly exposed to equity investments, including private equity and hedge funds.
Evolving lifestyle and consumption patterns: the enhanced awareness of the connection between health, living habits and the environmental context is assisting the spread of healthy lifestyles imprinted by the prevention and proactive promotion of well-being, especially in the higher income and higher education social brackets. Examples of this are the growing attention to healthy eating and to physical activity. However, unhealthy lifestyles and behaviours at risk are continuing, if not actually increasing, amongst the more vulnerable social brackets, and are recording increased addiction (drugs, alcohol, tobacco, compulsive gambling, Internet and smartphone addiction), mental discomfort, sleep disorders, incorrect eating habits and sedentariness, with high social costs linked to healthcare expenditure, loss of production and early mortality.
– a contract that will or may be settled in the entity’s own equity instruments and is: – a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or
– a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose, the entity’s own equity instruments do not include puttable financial instruments that are classified as equity instruments.
Financial liability: any liability that is: – a contractual obligation: – to deliver cash or another financial asset to another entity; or
– to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or
– contract that will or may be settled in the entity’s own equity instruments and is: – a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or
General account: investments reported in the financial statements (excluding financial assets categorized as unit- and index-linked or deriving from pension funds management) and cash and cash equivalents. They also include some liabilities, with features similar to investments, among which derivative liabilities referred to investment portfolio and REPOs.
Geopolitical, macroeconomic and financial instability: the weakening of multilateralism and of the traditional global governance mechanism are leading to increased tension between countries and to the resurgence of trade protectionism and populism. Associated with this altered geopolitical picture - with complex cause and effect relationships - is the worsening of macroeconomic conditions and a scenario of a continuing lowering of interest rates. The weakening of the initiative of the traditional political institutions is accompanying the success of coalitions and global coordination mechanisms promoted by the private sector and civilian society.
Green and sustainable investments: investments that support green and/or social projects, with the explicit aim of creating a positive impact and contributing to the United Nations Sustainable Development Goals.
Gross written premiums (GWP): gross written premiums of direct business and accepted by third parties.
Increasing inequality and reducing social mobility: the growing gap in the distribution of wealth between social groups and - more in general - the polarisation in accessing self-determination opportunities is accompanying a decline in social mobility, with a trend towards a protracted permanence in the state of poverty and exclusion, mainly tied to the socio-economic conditions of the household of origin.
Investments in internal strategic initiatives: they are total investments (included in the general expenses, in cash view - capex) included within the expenses baseline as the sum of all strategic initiatives considered in the Generali 2021 strategy.
Investments properties: direct investments in properties held in order to receive rent or to achieve targets for capital appreciation, or for both reasons. This asset class also includes investments funds that are mainly exposed to real-estate investments.
Lockup clause: it imposes the unavailability of the shares assigned with respect to some incentive plans (or a specific share) for a specific time horizon as defined by any individual plan. The clause provides for the commitment of the issuing Company and potentially of some shareholders not to pursue selected actions on the equity of the company itself in the period subsequent to a public offering.
NBM, new business margin: it is a performance indicator of the new business of the Life segment, equal to the ratio of NBV to PVNBP. The margin on PVNBP is intended as a prospective ratio between profits and premiums.
NBV, new business value: it is an indicator of value created by the new business of the Life segment. It is obtained by discounting at the date of new contracts the corresponding expected profits net of the cost of capital (net of the portion attributable to minority interests).
Net inflows: it is an indicator of cash flows generation of the Life segment. It is equal to the amount of premiums collected net of benefits paid.
Organizational entities with smart working: organizational entities where smart working is applicable in accordance with local laws and regulations.
Provision for outstanding claims: it comprises the estimated overall amounts which, from a prudent valuation based on objective elements, are required to meet the payment of the claims incurred during the current year or the previous ones, and not yet settled, as well as the related settlement expenses. The outstanding claims provisions shall be estimated as the total ultimate cost taking into account all future foreseeable charges, based on reliable historical and forecast data, as well as the specific features of the company.
Provision for unearned premiums: it comprises the unearned premium component, defined as the part of gross premiums written which is to be allocated to the following financial periods, and the provisions for unexpired risk on insurance contracts in force in excess of the related unearned premiums.
Provisions for sums to be paid: they are technical reserves constituted at the end of each financial year by companies operating in the Life segment in order to cover the overall amounts required to meet the payment of the capitals and annuities accrued, surrenders and claims outstanding.
Regulatory Solvency Ratio: it is the ratio of the Eligible Own Funds to the Group Solvency Capital requirement, both calculated according to the definitions of the SII regime. Own funds are determined net of proposed dividend. The ratio has to be intended as preliminary since the definitive Regulatory Solvency Ratio will be submitted to the supervisory authority in accordance with the timing provided by the Solvency II regulations for the official reporting.
Relevant personnel: it refers to general managers with strategic tasks, the Heads and the highest-level personnel of the key functions and the other categories of personnel whose activity can have a significant impact on the company risk profile in accordance to IVASS Regulation no. 38/2018, art. 2, paragraph 1, letter m).
Responsible Investment Guideline, RIG: document that codifies responsible investment activities at Group level.
RoE, Return on Equity: it is an indicator of return on capital in terms of the Group net result. It is calculated as the ratio of: – Group net result; to – average Group shareholders’ equity at the beginning and end of the period, adjusted to exclude other gains and losses directly booked to equity, included in Other Comprehensive Income, such as gains and losses on available for sale financial assets, gains and losses on foreign currency translation differences, unrealized gains and losses on hedging derivatives and unrealized gains and losses on defined benefit plans.
Shortage of planet resources and shift to circular/sharing economy: the increase in world population and the excessive exploitation of natural resources such as soil, land water, raw materials and food resources make the transition to circular and responsible consumption models necessary as they allow the resources use, scraps and produced waste to be reduced. Technological innovation and the spread of more sustainable lifestyles encourage the spread of new sharing-based consumption and production models, for example car sharing, co-housing, co-working and crowdfunding.
Social products: – products that respond to the needs of specific categories of customers or particularly unfortunate events in life, including products dedicated to the young, to the elderly, to the disabled, to immigrants, to the unemployed and to coverage for professional disabilities, or which in some way support and foster social inclusion; – products that promote a more prosperous and stable society, with particular attention on small and medium -sized enterprises and people involved in voluntary work; – products with high pension or microinsurance content; – products that promote responsible and healthy lifestyles, leveraging on the opportunities provided by new technologies, on the importance of preventive healthcare or other virtuous behaviours of policyholders; – products that supplement the public health service, designed to help manage the costs of treatment and assistance, as well as the reduction in earnings of customers in the event of serious illnesses or the loss of self-sufficiency.
Stranded asset: invested assets that may lose their economic value in advance of the expected duration, due to
regulatory changes, market forces, technological innovation, environmental and social problems associated with the transition to a low-carbon economy. They are typically associated with the coal and fossil fuel sector, with an indirect impact on the utilities and transport sectors.
Sustainable and Responsible Investments, SRI: assets managed according to Generali Insurance Asset Management’s SRI proprietary methodology both on behalf of Group insurance companies and third-party clients.
Shareholders & Governance governance@generali.com Manager: Michele Amendolagine mailto:integratedreporting@generali.com mailto:corporateaffairs@generali.com mailto:media@generali.com mailto:group_reward@generali.com mailto:csr@generali.com mailto:ir@generali.com mailto:governance@generali.com
Annual Integrated Report and Consolidated Financial Statements 2019 prepared by Group Integrated Reporting