Morningstar | Generali 1Q 2019: Decent Results Reported Again
Generali reported a searing set of results for the first quarter of 2019. The company has made about EUR 615 million of net and EUR 1.3 billion operating profit on an adjusted basis. These figures are close to our full-year estimates and are between 6% and 7% increases. We maintain our EUR 17.30 fair value estimate and no-moat rating.There's not a lot of negative news to be taken away from these results. Segment profits are up and holding expenses are down. We think probably two of the best key indicators in these results are the combined ratio, which was again a pleasing 91.5%. This shows the business continues to drive outperformance in this segment.
The second key indicator we like is the third-party assets within asset management. Here, we think Generali is moving to a higher-fee franchise model and third-party AuM is up 16% which is good for this movement.
The new business margin on the life side is a little light, but this is being made up for with decent inflows.
Overall, these results show a business with traction. They are solid across the board and there are few areas of weakness. We don't think the volume outweighs the value proposition within life because there will admittedly be some pressure here. And the higher net flows in these results reflect lower surrenders to some degree, and that is good quality. Premiums have definitely been influenced by a search for asset return security. And we still like the relationship with Banca Generali.
This is a continuation of a decent end to 2018.
Assicurazioni Generali is the parent company for The Generali Group (the Group), an insurance and financial services provider. The commercial offer is composed of savings and pure risks policies, which constitute the majority of the portfolio, which includes protection and pension funds. In the non-life sector the Group is focused primarily on the retail market. In addition, through the Europ Assistance Group, Co. is engaged in services in motor, travel, health, home and family. The Group has also expanded its business from insurance to a range of asset management, property and financial services.
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