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After World War II, Trieste’s future appeared uncertain: in 1947, Generali transferred its registered office to Rome to formalize its position as an Italian company. The Group resumed its expansion during the Italian economic boom years. An agreement was signed with the USbased Aetna in 1966, and in 1974 Genagricola was founded, which heads all agricultural activities of the Group. Generali transferred its registered office from Rome back to Trieste in 1990. Genertel, the first direct insurance company in Italy, was established in 1994. The Group took control of the AMB group in 1997 to promote growth in the German market. Banca Generali was established in 1998 in order to concentrate all asset management activities and services under one umbrella. There were some acquisitions in the first decade of the new millennium, e.g. INA and Toro, and joint ventures were launched in Central and Eastern Europe and Asia.
The new strategy for the Asset Management division was announced on 11 May. The objective is to address the needs of insurance companies and individuals in a low interest rate environment and supporting Generali’s shift towards a greater contribution from feebased business. The new Asset Management strategy is based on two pillars: broadening the investment capabilities and offering bespoke investment solutions to European companies and savings products to individual clients. This division will broaden investment capabilities and enlarge product offering to reach € 500 billion of assets under management by 2020.
In Paris, the Argus de l’Assurance digitale award within the “Best mobile strategy” category was received for the Mobile Hub product, a mobile app launched internationally and known in France as Mon Generali. The award, assigned by one of the most prestigious specialized magazines, L’Argus de l’Assurance, is in recognition of the Group’s commitment to realize its strategic plan with an increasingly digital and innovative approach which will render Generali simpler, smarter, faster.
The Board of Directors approved the creation of a new position, the Group Chief Operations & Insurance Officer, effective as of 1 January 2018. The responsibility for this function - which integrates the activities of the Operations division with those of the Insurance Officer, in addition to directly reporting to the Group CEO - has been entrusted to Jaime Anchustegui Melgarejo, previously manager of the EMEA division; he will therefore become a member of the Group Management Committee.
The Net Promoter Program of Generali was recognized as the world’s best by Medallia during the Experience Europe 2017 event held in London.
Management Report 31 July 2018: Board of Directors approving the Consolidated financial half-yearly report as at 30 June 2018 1 August 2018: Publication of the results as at 30 June 2018 7 November 2018: Board of Directors approving the Interim financial information as at 30 September 2018 8 November 2018: Publication of the results as at 30 September 2018 21 November 2018: Investor Day
We aim to become the first choice of clients and distributors. We aim to offer insurance solutions and services that are simple, tailored and even more innovative to meet their needs, also digital ones, and to improve their customer experience. The digital transformation taking place in our business units allows us to increase the efficiency of our distribution network across the world: our aim, in fact, is for the interaction with customers to be increasingly based on a consulting approach, i.e. based on an understanding of the needs of individual customers and on the offer of a personalized solution.
We actively engage in creating more stable communities while monitoring and tackling the effects of a changing society. We develop and offer flexible and modular solutions with elevated social security and welfare content for the coverage of healthcare costs and other potential current and future needs for individuals, families and communities. We undertake to strengthen dialogue with individuals during their entire period of interaction with our companies. We provide customers with complete and easily accessible information on products and services while helping them to understand the primary risks that may affect their income capacity and aiding them in accurately assessing their capacity to save as well as identifying their current and future needs. We believe that insurance coverage is the most appropriate tool to forecast and meet potential needs of both younger and older individuals with the required advance notice; we therefore formulate and present offers even in the case of market contexts with little knowledge and low individual propensity for insurance solutions.
As to ensure the attainment of the business strategy, respecting our values, we have developed the Generali People Strategy that is based on four priorities: we measure and promote engagement In June 2017, we carried out the second edition of the Global Engagement Survey, a managerial tool for continuous improvement.
Balance Sheet Committee examining and identifying topics with material impact on the financial statements of the Group and Parent Company
58 average age 3 induction days on corporate administrative liability, market abuse, management of inside information and reporting of non-financial information 38% female director 61% independence level 96% average participation in Board meetings 1 executive director 14 Board meetings
Clear governance and compliance with the regulatory environment 6 Remuneration package for all those described, with the exception of the executives with key responsibilities in control functions to whom specific remuneration policy and rules are applied.
Combined Ratio, Cash Generation/Dividend) Minimum 10% RORC (up to 15% for business roles)
Generali S.p.A. will terminate its reinsurance support to the insurance subsidiaries of Generali Nederland, with the consequent withdrawal by the Dutch life company of the reinsured portfolio.
An improvement of the method for attributing indirect costs was applied to the portfolios of the Generali Employee Benefits and of the reinsurance directly accepted by the Parent Company. This significantly affected the greater impact in the current year of administrative expenses on the Company’s net premiums.
To increase and update management, transversal and technical skills of the entire corporate population, training classes geared to achieve technical excellence (Generali Advanced Technical Excellence) were confirmed and updated. Training classes on managerial soft-skills, offered to all organisational levels and involving all functions, were added to this initiative; the Tam Tam Talks, which by proposing multiple view points and multidisciplinary experiences on the realities of the present, pursue the objective of increasing the collective capacity of understanding future contexts characterised by volatility, uncertainty, complexity and ambiguity.
As a major component of the People Strategy of the Group, there have been several Diversity & Inclusion initiatives in 2017. First of all, the Group governance was defined with the establishment of the Group D&I Council, a body responsible for setting out objectives and activities for the promotion of the D&I, at Group level, and in the local contexts. In addition the Group D&I Specialist Network, an HR International network supporting the D&I Council in the analysis and set up of objectives as well as in the implementation of inclusive activities, was strengthened. To maximise the value of diversity, teamwork and sense of belonging, the Managerial Acceleration Program includes an entire ad hoc training module that reaches 8,900 managers at the group level.
On the basis of article 36 of Consob resolution no. 16191/07, as subsequently amended, and article 2.6.2, paragraph 12, of Rules for the Markets organized and managed by Borsa Italiana S.p.A., it is hereby certified that in the Generali Group are met the “conditions for the listing of shares of companies with control over companies established and regulated under the law of non-EU countries” and that adequate procedures have already been adopted to ensure full compliance with the foregoing regulation.
Significant intra-Group transactions are discussed in the relevant sections of this Report. The balance sheet and annexes 5, 16, 17, 30 and Part C of the Notes on the Accounts provide details on the financial and economic aspects of these transactions.
(EC) No. 1606/2002, the Legislative Decree No. 58/1998 and Legislative Decree No. 209/2005, as amended by Legislative Decree No. 32/2007.
The RAF statement is complemented by qualitative assertions (risk preferences) supporting the decision-making processes as well as by risk tolerances providing quantitative boundaries, limiting excessive risk-taking. Tolerance levels are set on the basis of capital and liquidity metrics.
The RAF governance provides a framework for embedding risk management into day-to-day and extraordinary business operations and control mechanisms as well as the escalation and reporting to be applied in case of risk tolerance breaches. Should an indicator approach or breach the defined tolerance levels, escalation mechanisms are activated.
Credit risks include: — pread widening risk, defined as the risk of adverse changes in the market value of bonds. Spread widening can be linked either to a decrease of the market ’s assessment of the creditworthiness of one or more specific obligors (often implying a decrease in rating) or to a market-wide systemic reduction in the price of assets; 81 Parent Company Financial Statements
The most important strategy for the mitigation of credit risk used by the Company is, as for financial risks, the application of a liability-driven SAA, which can limit the impact of the market spread volatility. In addition, the Company actively manages counterparty default risk by also using a collateralization strategy in order to mitigate the losses that the Company might suffer as a result of the default of one or more of its counterparties.
Although the ultimate responsibility for managing risk sits in the first line of defence (so-called risk owners), the Risk Management Function 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.
84 Assicurazioni Generali Management Report and Parent Company Financial Statements 2017
Net underwriting balance (**) 238,997 90 Assicurazioni Generali Management Report and Parent Company Financial Statements 2017
Total - -1,232,701 Other ordinary income and changes -1,232,701 101 + Profit from ordinary operations 1,071,991
2. Unearned premium provision for supplementary coverage 3. Provision for claims outstanding 65 341,306,727 4. Provision for profit sharing and premium refunds 66 19,424,495 6. Provisions for policies where the investment risk is borne by the policyholders and relating to the administration of pension funds 68 0 69 420,540,548 70 1,278,494,740 carried forward 45,221,516,923 102 Assicurazioni Generali Management Report and Parent Company Financial Statements 2017
The financial statements were drawn up in compliance with Legislative Decree No. 209 dated September 7th 2005 (Code of the Private Insurance), in force at the reference date as well as with Legislative Decree No. 173 dated 26 May 1997, as amended by the Legislative Decree No. 139 dated 18 August 2015 and by the Legislative Decree No. 58 dated 24 February 1998 of the Italian Finance Consolidation Act (TUF), amended and integrated. In addition, the provisions of which at the ISVAP (now IVASS) Regulation No. 22 dated 4 April 2008 are applied with the amendments and integrations, and relative ISVAP (now IVASS) Regulations No. 53 dated 6 December 2016, the other implementing regulations issued by the institute of vigilance and by CONSOB. Furthermore, given the specific nature of the industry and for what is not provided in the above-mentioned disposals, the Civil Code rules have been applied, as well as the indications of national accounting standards issued by the OIC are considered.
Land and buildings are recognized on the basis of purchase or construction cost and additional acquisition costs, net of accumulated depreciation and impairment losses. The costs of improvements and renovations with the aim of increasing the value of the assets and extending the remaining useful life are also capitalised. The cost is also increased on the basis of revaluations made in accordance with legislation introduced by special laws.
The value of derivatives is determined by referring to their respective market value quotations, and, if these are not available, on the basis of a prudent valuation of the probable realisable value using calculation methodologies adopted by the market.
Receivables from policyholders include premiums accrued but not yet collected. Commissions payable to intermediaries for premiums in the course of collection are recorded in other liabilities in the balance sheet.
The Italian direct business portfolio includes contracts entered into by the Company (as an Italian insurance company), comprising contracts stipulated by subsidiary branches in EU member countries; the Italian indirect business portfolio includes contracts wherever stipulated by the Company if the ceding company is Italian, or is established in Italy having its registered office in another state.
The methodology consists in the analytical evaluation of the ultimate cost of each claim in all lines of business and in the verification of the results achieved through the application of statistical and actuarial methodology. The exception is damage to property in the civil liability motor sector managed by the Company, reported in the last ninety days of the financial year, which are valued according to the “average cost” of homogenous groups of claims.
Market values of land and buildings have been determined based on the principles set out by Title III, Paragraph I, of ISVAP (now IVASS) Regulation No. 22/2008 amended and integrated. In particular, with reference to the properties for own use, valuation criteria alternatively used for the assessment of the market value are the following: — income method — sales comparison method.
Increases for the year for: acquisitions, subscriptions or payments 269,973 reversal value 0 revaluations 0 other changes 413,672
The increase in the year is mainly due to: — increase in the value of the subsidiary Generali Finance B.V. following the purchase of shares from Generali Italia (change of 199,251 thousand); — increase in the value of the investments in Generali Vietnam Life Insurance (+38,537 thousand), in Generali Vitality Gmbh (+10,800 thousand) mainly due to increases in share capital 137 Parent Company Financial Statements
The other items individually considered refer to sums under 50,000 thousand.
142 Assicurazioni Generali Management Report and Parent Company Financial Statements 2017
Haven Funding (32) Plc 3,380 GBP fixed 30/11/32 yes Other clauses
Final amount of the 2017 financial year 1,561,808 3,568,250 −3,040 793,055 92,676 802,313 30,425 118,769 20,123 153,474 4,147,612 1,823,197 312,362 1,404,459 14,825,483 8.4 c) Outline of changes to shareholders’ funds over the last three years 150 Assicurazioni Generali Management Report and Parent Company Financial Statements 2017
During the year the provision for unexpired risks has been set up for the indirect business for an amount of 444 thousand.
13.4 Breakdown of other loans and other financial liabilities – Item G.VI
Liabilities to banks and other financial institutions, amount to 1,188,706 thousand, refer mainly to loans granted from Deutsche Bank and BNP Paribas for 968,303 thousand relative to the Group indirect pooling
II. Guarantees received a) from Group Companies, associates and other companies in which a significant interest is held 0 0 b) from third parties 549.871 376.396
(in thousand euro) Direct business Reinsurance business Total 169 Parent Company Financial Statements
The item other technical income consists, in particular, of the commissions collected from the internal funds of the Dubai Branch.
(+) Balance of other technical items 0 0 −70 −6 0 0
(–) Charges relating to claims 76,389 4 −403 7,024 −131 1
(+) Positive share of investments allocated from the non-technical account 27,446 17,066 44,512 20.2 Life insurance 20.2.1. Summary of technical accounts by line of business – Italian portfolio – (attachment 27)
(in thousand euro) 2017 from equities: Dividends and other income from equities of Group companies 979,930
Losses on the realisation of investments: Losses from sale of land and buildings 0
Devaluations of credits due by policyholders 566,421 135,941 −47,699 −11,448 518,722 124,493
Negative reserves for own shares 3,040 0 3,040 4. Information according to the Consob circular No. 6064293 dated 28 July 2006 a) Transactions with related parties
With regard to transactions with related parties, it should be noted that the main transactions, carried out at market or at cost prices, were undertaken through insurance, reinsurance and co-insurance relations, administration and management of the securities and real estate portfolio, leasing, loans and guarantees, administrative services, IT services, secondment of employees and claims settlement.
From transactions with ceding companies1 428,005 34,870 5,436 0 468,311 292.82
With regard to Art. 18 of the Procedures on transactions with related parties approved by the Board of Directors in 2017, it should be noted that, beyond the aforementioned operations (i), no transactions of major significance have been completed in the period of reference (ii) no Transactions with related parties that have had a significant impact on the financial position or results of the Group have been completed (iii) there are no changes or developments of the Transactions described in the previous annual report that have had a significant effect on the situation balance sheet or results of the Company.
Adjustments arising from financing and investing activities -44,477 -16,736 1. Profit (loss) of the year before taxation, interests, dividends and capital gains/losses deriving from cession -34,091 -295,340
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(* ) w ith re fe re nc e to th e co un te rp ar t i n th e op er at io n 269 Parent Company Financial Statements
The Company monitored legislative developments during the year, activated compliance-checking plans and continued its ongoing reinforcement of the procedural structure, as described in the parent company’s Risk Report and Financial Statements. The Internal Control and Risk Management System policies are also adopted by the main subsidiaries, having regard to the specific legislation in each country in which the Group operates, and any special features of the business. These policies are continuously updated. In the context of constant development and reinforcement of controls, in accordance with the applicable industry regulations, the Board of Statutory Auditors has constantly monitored the adequacy of the ICRMS of the Company and its Group. In particular, the BSA: i) took note of the favourable opinion of the adequacy of the ICRMS issued half-yearly by the Board of Directors after consulting the Risk and Control Committee; ii) examined the summary document regarding the assessment of the adequacy and efficacy of the Internal Control and Risk Management System drawn up by the Group Audit, Group Compliance, Group Risk Management and Group Actuarial Functions; iii) attended all meetings of the Risk and Control Committee, obtaining information about the initiatives that the Committee has decided to promote or request on specific subjects; iv) obtained information about the development of the corresponding organisational structures and the activities performed by the Group Audit, Group Compliance, Group Risk Management and Group Actuarial Functions, partly by means of discussions with the managers concerned; v) examined the reports on the activities of the Group Compliance, Group Risk Management and Group Actuarial Functions submitted to the Risk and Control Committee and the Board of Directors; vi) examined the Group Audit Manager’s half-yearly Complaint Reports; vii) examined the Audit Plan drawn up by the Group Audit Function and approved by the Board of Directors, observed that it had been complied with, and received information about the audit results; viii) obtained information about the activities of the Supervision and Control Committee instituted by the Company in compliance with Legislative Decree no. 231/2001, by means of specific reports and update meetings regarding the activities performed by it; ix) obtained information from the managers of the respective company functions; x) exchanged information with the supervisory bodies of the subsidiaries, as required by ss. 151.1 and 151.2 of the CFBA; xi) met and exchanged information with the Executive Director responsible for supervising the ICRMS; xii) obtained information about the development of the Group’s regulatory system, in particular the Company ’s structure of policies, regulations, guidelines and procedures designed to ensure compliance with the specific regulations of the insurance industry and listed companies applicable to or approved by the Company.
The BSA monitored, within the terms of its remit, the general layout of the financial statements and the consolidated financial statements in accordance with the legislation and specific regulations governing drafting of insurance companies’ financial statements. The BSA declares that the consolidated financial statements of the Assicurazioni Generali Group were drawn up in compliance with the IAS/IFRS International Accounting Standards issued by the IASB and approved by the European Union, in compliance with EU Regulation no. 1606 of 19 July 2002 and the CFBA, and Legislative Decree 209/2005, as amended. The consolidated financial statements were also drawn up as required by ISVAP Regulation no. 7 of 13 July 2007, as amended, and contain the information required by Consob Notice no. 6064293 of 28 July 2006.