Sale completed of operations both in Panama and Colombia, countries where Generali is still present through Europ Assistance and its
Plan (LTIP) and the amendments to the Articles of Association. It also approved the proposal to delegate the Board of Directors to increase the share capital with free issues in one or several transactions, for the purposes of the 2018 LTIP.
Option of early redemption announced on all perpetual subordinated notes outstanding belonging to ISIN XS0399861326 exercised in November. The exercise of this option was authorized by the
We believe it is fundamental to build an organization focused on the customer, with a limited number of decision-making levels and strong inter-functional transversality. We implemented a Net Promoter Score (NPS) programme in 58 Group’s business units, which facilitated reimagining key processes for the benefit of end customers. Furthermore, we favour the customer-centricity of all of our people by means of consistent incentive systems, training programmes and onboarding processes that call for client-facing experience.
As stated in our climate change strategy approved by the Board of Directors in February 2018 and explained in more detail in the technical note published by the Group in November 2018, our commitment calls for specific actions with regard to the direct impact of our activities as well as investments and underwriting, and identifies stakeholder dialogue and engagement as the instruments to support our transition.
In 2018, global GDP is expected to increase to 3.6%. The global macro-economic and political landscape was affected by topics that aroused significant concern also on the markets during the year, such as the budget law in Italy, the escalation of trade friction (especially between the USA and China), the worsening of the crisis in the more fragile emerging markets and the protests of the Yellow Vests in France. Growth of real GDP of the Eurozone in 2018 is forecast to be 1.9%, down compared to 2017 (2.5%). The unemployment rate dropped to the minimum low of the last decade, with an acceleration of wages in spite of the inflation rate being low. The European Central Bank (ECB) ended the quantitative easing during the year, but will continue to reinvest bonds on maturity; the ECB’s first increase in rates will be subordinate to the changes in inflation. The major important topics for the financial markets during 2018 within the Eurozone were Brexit and developments on the Italian political scene. As regards concern for the latter, the rating agencies Fitch and Moody’s lowered their creditworthiness opinion while alarm on Italy’s public finance pushed the tenyear BTP-Bund spread up, and it closed 2018 at 253 bps.
Risk Report, p. 93 of the Annual Integrated Report and Consolidated Financial Statements 2018 for more detailed information on the risk management model and on the capital requirement
Our ambition is to be a life-time partner to our customers by combining simplicity and innovation with empathy and care along the entire customer journey, at all touchpoints and channels. We strive to be proactive and focused on customer relationships and integrate protection, prevention and assistance, creating tailor-made products and services that meet our clients’ needs. We will therefore focus on 5 transformation actions: 1. we will digitally enable our advisory distribution network: through the Agent Hub, we will provide distributors with adequate digital tools, training and the mindset to become true life-time partners, and we will provide our agents with a commercial dashboard that will include: – 360° view of the customer, including all of their products and the past interactions; – needs-based assessment tools to advice clients based on their stage of life; – the possibility to personally involve the customer through the digital and social channels; – campaign management tools that allow Generali to manage new solution launches; 2. we will offer the best in class proposition and service innovations with the benefit of digital and data analytics; 3. we will seamlessly connect Generali, our agents and customers together on mobile and web (Mobile and Web Hub); 4. we will continue to listen to our customers and to act based on their feedback in order to improve the service offered across all touchpoints; 5. we will strengthen our brand12 to become 1st choice in the Relationship Net Promoter Score among our European international peers by 2021.
Core business Key Performance Indicators (KPIs) (i.e.: operating result, net profit, new business value, combined ratio, cash generation/dividend) Minimum 10% RORC (up to 15% for business roles)
— Since 1 April 2018, Assicurazioni Generali S.p.A. has commenced a stage preparatory for transferring the insurance portfolio of the Japanese branch to Mitsui Sumitomo Insurance Group (MSIG) which provides the possibility, offered to the policyholders, to directly renew with the acquiring third-party Company their insurance policies expiring after 1 April 2018. This stage will end on 31 March 2019 and will be followed by the transfer of the remaining insurance portfolio and resulting closing of the branch.
The gross premium collection from the Life segment amounted to a total of 1,630,876 thousand (1,708,336 thousand in the previous year).
48 Assicurazioni Generali Management Report and Parent Company Financial Statements 2018
The lower results generated by the reinsurance directly accepted by the Parent Company, the Generali Employee Benefits unit and the London branch significantly affect the decrease in the net underwriting balance.
With reference to the reinsurance accepted by Generali Levensverzekering Maatschappij N.V., the reinsurance contract terminated in the early months of the year after the Company was sold. The lower contribution of result and premiums totalled 14,190 thousand and 38,383 thousand, respectively.
Operating costs showed a total increase of 3,053 thousand (from 23,752 thousand to 26,804 thousand), mainly due to the greater profit sharing recognized to the Group’s transferee companies in reinsurance receivable contracts, with the ratio on net premiums standing at 20.9% (16.5% in the previous year).
Realized gains and losses were positive for 10,600 thousand; in the previous year they amounted to 37,353 thousand. In the current year, realized gains and losses mainly arising from the closing of several positions of derivative financial instruments were recorded for 12,881 thousand and from gains on the bond portfolio for 1,155 thousand (12,653 thousand in 2017), partially offset by net realized losses on mutual fund units for 3,914 thousand (2,049 thousand in 2017). The previous year, on the other hand, was affected by the realized gains deriving from the sale of the equity stake not classified in the long-term segment in the subsidiary Guatemala Aseguradora General S.A. for 19,610 thousand.
Details of the net income from investments, totalling 2,489,982 thousand (2,350,791 thousand in the previous year), are provided below.
The results of the ordinary financial operations amount to 2,422,237 thousand for the year and 2,450,022 thousand in the prior year. Income allocated to technical accounts amounts to 611,953 thousand for the year and 816,384 thousand in the prior year.
Other ordinary income and charges show a negative balance of 1,227,606 thousand, slightly down compared to the 1,232,701 thousand of the previous year, likewise negative.
The reduction of the mathematical provisions primarily derived from the transfer of the reinsurance contracts with the company Generali Levensverzekering Maatschappij N.V. following its divestment (-1,243,385 thousand) and from the ongoing contraction of the portfolio in run-off with the subsidiary Alleanza Assicurazioni S.p.A. (-505,755 thousand ).
These and other social and environmental aspects are discussed in the section dedicated to Sustainability of the website www.generali.com.
(b) Included pecuniary loss, legal protection, assistance and credit and suretyship
Based on the scenarios described above an increase in net profit is expected for the Company compared to 2018.
In addition to the SCR coverage, the Company calculates the MCR required to determine the minimum level of capital, under which the Company would be exposed to an unacceptable level of risk when allowed to continue its operations. Moreover, to define MCR coverage, stricter OF eligibility rules are applied8. The MCR coverage ratio is presented in the following table.
The Group PIM is deemed to be the most appropriate way of assessing the SCR in terms of granularity, calibration and correlation of the various risks.
Life and health underwriting risks can be distinguished in biometric and operating risks embedded in the life and health insurance policies. Biometric risks derive from the uncertainty in the assumptions regarding mortality, longevity, health, morbidity and disability rates taken into account in the insurance liability valuations. Operating risks derive from the uncertainty regarding the amount of expenses and the adverse exercise of contractual options by policyholders. Policy lapse is the main contractual option held by the policyholders, together with the possibility to reduce, suspend or partially surrender the insurance coverage.
Although the ultimate responsibility for managing risk sits in the first line of defence (so-called risk owners), the Risk Management defines methodologies and processes for the identification, measurement, management and monitoring of the most important risk. In doing so, it provides management at all levels with a holistic view of the broad operational risk spectrum.
The Annual Liquidity Forecast for the current period is the main quantitative support for determining future cash flows, potential liquidity buffers to be held and any source of financing to be activated.
Dear Shareholders, the profit for the year amounts to 1,473,283,234 euro.
Additional information on the preparation of the financial statements The information on reclassified statements and alternative performance indicators presented pursuant to the Consob recommendation of 28 July 2006 are aimed at providing a better understanding of the data and of the company’s operational performance for the users of the financial statements. In this perspective, we deemed it opportune to provide further elements for assessing the underwriting results of the company, by describing the criteria adopted in the formation of the key technical performance indexes generally used by the Company when drawing up the statement concerning the “significant data” of the year 2018, which are calculated net of reinsurance.
1. EARNED PREMIUMS, NET OF REINSURANCE: a) Gross premiums written 1 1,679,800,451 b) (-) Outward reinsurance premiums 2 545,300,146 c) Change in the gross provision for unearned premiums 3 32,810,531 d) Change in the provision for unearned premiums, reinsurers' share 4 5,387,618 5 1,107,077,392 2. (+) ALLOCATED INVESTMENT RETURN TRANSFERRED FROM THE NON-TECHNICAL ACCOUNT (ITEM III. 6)
3. OTHER TECHNICAL INCOME, NET OF REINSURANCE 7 890,936 4. CLAIMS INCURRED, NET OF RECOVERIES AND REINSURANCE a) Claims paid aa) Gross amount 8 847,137,970 b) Recoveries net of reinsurance aa) Gross amount 11 2,076,893 c) Change in the provision for claims outstanding aa) Gross amount 14 164,742,692 5. CHANGE IN OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE 18 0 6. PREMIUM REFUNDS AND PROFIT SHARING, NET OF REINSURANCE 19 40,910 7. OPERATING EXPENSES a) Acquisition commissions 20 204,037,638 b) Other acquisition costs 21 28,870,183 c) Change in commissions and other acquisition costs to be amortised 22 0 d) Collecting commissions 23 792,740 e) Other administrative expenses 24 54,934,662 f) (-) Reinsurance commissions and profit sharing 25 58,799,141 26 229,836,082 8. OTHER TECHNICAL CHARGES, NET OF REINSURANCE 27 10,834,483 9. CHANGE IN THE EQUALISATION PROVISION 28 152,640 10. BALANCE ON THE TECHNICAL ACCOUNT FOR NON-LIFE BUSINESS 29 206,580,609 116 Assicurazioni Generali Management Report and Parent Company Financial Statements 2018
4. OTHER TECHNICAL INCOME, NET OF REINSURANCE 44 18,628,478 5. CLAIMS INCURRED, NET OF REINSURANCE a) Claims paid aa) gross amount 45 1,765,013,077 b) Change in the provision for claims outstanding aa) gross amount 48 89,072,278 6. CHANGE IN THE PROVISION FOR POLICY LIABILITIES AND IN OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE a) Provisions for policy liabilities aa) gross amount 52 −483,764,839 bb) (-) reinsurers' share 53 −8,063,180 54 −475,701,659 b) Change in the provision for claims outstanding aa) gross amount 55 15,503,432 c) Other provisions aa) gross amount 58 6,129,720 d) Provisions for policies where the investment risk is borne by the shareholders and relating to the administration of pension funds aa) gross amount 61 −5,932,711 118 Assicurazioni Generali Management Report and Parent Company Financial Statements 2018
The provision for outstanding claims is determined by a prudent assessment of claims made on the basis of objective and prospective considerations of all predictable charges. The provision is considered adequate to cover the payment of compensation and the settlement costs related to claims occurred during the year, even if not yet reported.
For the Italian direct business portfolio, the provisions include: a) the mathematical provision, which includes unearned premiums, the provision for health and professional additional premiums, the additional reserve for demographic risks and the additional reserve for financial risks; b) the unearned premium provision of the complementary insurances, calculated using the methods provided by Paragraph 18 of Annex 14 to Regulation No. 22 dated 4 April 2008, mentioned above; c) the provision for sums to be paid, which equals the amounts needed to cover the payment of capitals, annuities, redemptions and claims incurred but not yet paid at the end of the year; d) the provision for future expenses; e) the provisions for profit sharing, representing the amounts to correspond to the policyholders or to the beneficiaries of the contracts based on their quota of technical profit, which are not considered in the mathematical provision.
The increases for the year refer to the new activations carried out during the year for software costs related to Group projects regarding the restructuring of the IT security systems and the development of commercial initiatives.
Decreases for the year for: sales or redemptions 57,711 devaluations 16,765 other changes 472,799
Miscellaneous assets amount to 199,302 thousand and mainly refer to the connection account that reports a credit of the life business towards the non-life business.
Furthermore, the deferred charges that have a residual duration of over five years are: — discount on bond issues, subordinated liabilities and loans for 11,494 thousand.
In the indirect business instead, it has been needed to recognize a provision for unexpired risks for an amount of 93 thousand.
Attestation and Reports 10.5 Other life technical provisions – Item C.II.5 – by provision type and line of business.
Section 11 – technical provisions for policies where the investment risk is borne by the policyholders and technical provisions relating to the administration of pension funds – Item D
Credits arising from reinsurance operations 0 154,178 0 3,160 0 157,338
Change in unearned premiums, mathematical and other provisions −27,576 461,490 433,914 657,652 −223,738
Reversal of commissions relating to devalued or cancelled premiums of previous years 24
19.9 Details of financial charges and unrealised losses on investments for the benefit of policyholders who bear the investment risk and on investments relating to the administration of pension funds – Item II.10 (attachment 24)
The investment return assumed for the determination of the quota to be transferred to the non-technical account arises from the amounts, registered in the technical account, of the investment profits and related financial charges. Profits and unrealised gains as well as charges and unrealised losses deriving from investments relating to item D (held for the benefit of policyholders who bear the investment risk and relating to the administration of pension funds) are excluded. These items, therefore, continue to be accounted for in the technical account.
(in thousand euro) Isvap Class I Isvap Class III Isvap Class IV Isvap Class V Isvap Class VI
(+) Investment profit of the life branch net of the quota allocated to the non-technical account 11,574
Attestation and Reports 21.4 Details of other charges – Item III.8
Income taxes for the year show a positive balance of 146,798 thousand (121,491 in the previous year), due to the following components: — income for accrual IRES for 189,612 thousand (161,760 thousand in the previous year), in line with the positive trend of the dividends received from Group companies, which have more than compensated the negative effects linked to the increase of the earnings before taxes; — accrual IRAP for 4,827 thousand (5,470 thousand in the previous year); — taxes paid abroad for 25,058 thousand (24,163 thousand in the previous year); — taxes due in Italy on income of certain foreign subsidiaries for 21,728 thousand (10,636 thousand in the previous year); — a charge of 855 thousand for other substitute taxes on property contributions in real estate funds.
Income from other financial investments 0 12 0 0 0 12
22.4 Transfer of securities from the durable to the non-durable classification and vice versa or sale of durable securities
Emoluments in compliance with Article 78 of CONSOB Ruling No. 11971 dated 14 May 1999, as modified by CONSOB resolution No. 18049 dated 23 December 2011.
Company has committed to subscribe for at market value, directly or indirectly, capital of the subsidiary for up to 250 million euros; ii) a “Commitment Letter to pay and subscribe for a full T2 item” with which the Company is instead committed to subscribe, directly or indirectly, bonds Tier 2 of the subsidiary at market value for up to 250 million euros; iii) investments, relating to the capital increases carried out, described in section 2.2.1. of this note.
14 b NQ 1 Generali Colombia S.A. BOGOTA' Carrera 7a. No. 72-13, Piso 8 - COLOMBIA COP 15 b NQ 1 Generali Colombia Vida S.A. BOGOTA' Carrera 10a 28/49 - COLOMBIA COP 16 b NQ 1 Generali Companhia de Seguros LISBONA Rua Duque de Palmela no. 11 - PORTOGALLO EUR 17 b NQ 9 Generali Consulting Solutions WILMINGTON 1209 Orange Street - STATI UNITI D'AMERICA USD 18 b NQ 9 Generali CST S.r.l. TRIESTE Via Machiavelli, 4 - ITALIA EUR 19 b NQ 2 Generali Deutschland AG MONACO Adenauerring 7 - GERMANIA EUR 20 b NQ 1 Generali Ecuador S.A. GUAYAQUIL WTC Torre B Piso 15, Avenida Francisco de Arellana - ECUADOR USD 21 b NQ 2 Generali España Holding S.A. MADRID Calle Orense 2 - SPAGNA EUR 22 b NQ 2 Generali Finance B.V. AMSTERDAM Diemerhof 42 - OLANDA EUR 23 b NQ 2 Generali Financial Asia Ltd HONG KONG 5/F, 14-18/F Generalli Tower, 8 Queen's Road East - HONG
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,9 246 Assicurazioni Generali Management Report and Parent Company Financial Statements 2018
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Notes on the accounts - Attachment 17 Company Assicurazioni Generali S.p.A. Year 2018
Details of classes I, II, III, IV of "guarantees, commitments and other evidence accounts" Current year Previous year I. Guarantees issued: a) fidejussions and endorsements issued in the interest of parent companies, affiliated companies and affiliates of parent companies ............... 1 0 31 0 b) fidejussions and endorsements issued in the interest of associated companies and other companies in which a significant interest is held .......... 2 0 32 0 c) fidejussions and endorsements issued in the interest of third parties ............. 3 0 33 0 d) other personal guarantees issued in the interest of parent companies, affiliated companies and affiliates of parent companies ............... 4 796,291 34 1,895,083 e) other personal guarantees issued in the interest of associated companies and other companies ................................................. 5 0 35 0 f) other personal guarantees issued in the interest of third parties ..................... 6 0 36 0 g) guarantees secured by mortgages for obligations of parent companies, affiliated companies and affiliates of parent companies ................................. 7 0 37 0 h) guarantees secured by mortgages for obligations of associated companies and companies in which a significant interest is held ................... 8 0 38 0 i) guarantees secured by morgages for third parties obligations ........................ 9 0 39 0 l) guarantees issued for obligations of the Company ......................................... 10 0 40 45,315 m) assets deposited for accepted reinsurance operations ...................................................................................................... 11 170,767 41 118,458 Total .......................................................................................................................... 12 967,058 42 2,058,856 II. Guarantees received: ..................................................................................... a) from group companies, associated companies and other ............................... 13 0 43 0 b) from third parties ............................................................................................ 14 598,596 44 549,871 Total .......................................................................................................................... 15 598,596 45 549,871 III. Guarantees issued by third parties in the interest of the Company: ................. a) from group companies, associated companies and other .............................. 16 0 46 0 b) from third parties ............................................................................................ 17 101,321 47 90,475 Total .......................................................................................................................... 18 101,321 48 90,475 IV. Commitments: a) commitments for acquisitions with obligation to resale ................................... 19 0 49 0 b) commitments for sales with obligation to buy back ......................................... 20 0 50 197,898 c) other commitments ........................................................................................ 21 2,968,196 51 2,889,024 Total .......................................................................................................................... 22 2,968,196 52 3,086,922 V. Assets relating to pension funds managed in the name ..................................
Notes on the accounts - Attachment 32 Company Assicurazioni Generali S.p.A. Year 2018
On 31 July 2018, the Company’s Board of Directors approved the adoption of a new organisational model, effective as of 1 September 2018. This new model involved: – the creation of the position of General Manager, reporting directly to the Group CEO, to which Frédéric de Courtois was appointed; – the re-definition of the scope of the role of CEO of GBL & International, renamed CEO International; this position is held by Jaime Anchùstegui; – the extension of the scope of responsibility of Marco Sesana, Country Manager Italy, to include Global Business Lines, as well as the extension of the scope of responsibility of Jean-Laurent Granier, Country Manager France, to include Europ Assistance; – the appointment of Cristiano Borean as the new Group CFO, following the termination of the employment relationship between the Company and the previous Group CFO, Luigi Lubelli. Cristiano Borean therefore also joined the GMC.
The Group Audit, Group Compliance, Group Risk Management, and Group Actuarial Functions constitute the Fundamental Functions pursuant to IVASS Regulation no. 38/2018. In order to ensure a consistent approach at a Group level, the Company defines the Group guidelines on the governance system supplemented by the inter-
The Board of Statutory Auditors has perused and obtained information about the organisational and procedural activities conducted pursuant to Legislative Decree 231/2001, as amended, regarding the administrative liability of organisations. The main aspects related to organisational and procedural activities implemented by the Company pursuant to Legislative Decree 231/2001 are represented in the Report on corporate governance and ownership structure. No noteworthy facts and/or circumstances emerged from the report submitted by the Surveillance Body regarding the activities performed.
9.1. Activities of the Board of Statutory Auditors for the financial year 2018
(ii) the alleged failure to implement Art. 3 of the Articles of Association of the Foundation, as it was, in his opinion, almost totally lacking application due to the alleged lack of support to “Social, health and social-health assistance (with specific reference to the disabled, ed.); charity, education, and training” sectors.