Generali launches a 500 million buy back

A new EUR 500 million buyback plan will be submitted to the shareholders' meeting next April and will start as early as this year. A business plan that proceeds in line with targets, which could be exceeded on remittances and net cash flows for the parent company. A combined ratio that is expected to remain below 96% during 2024 'thanks to the tariff increases and technical measures implemented in 2022 and 2023, which will continue in 2024'. On the Investor Day, which will take stock of the implementation of the plan to 2024 (which is now drawing to a close), Generali "confirms solid performance and cash generation, the strong Solvency Ratio and the proactive approach to debt management" and is therefore launching a new share buy-back plan, emphasising"the commitment to shareholder remuneration and security regarding the group's cash and capital position". A move, reiterated group CEO Philippe Donnet, that we are making because we are "confident of the effective completion of our plan, with which Generali has delivered strong growth and created value for all stakeholders. Recent acquisitions have further consolidated our leadership in the European insurance market and expanded our asset management business globally".

The Lion emphasised that the sensitivity of the group's Solvency Ratio to market factors had been "significantly reduced". As a result, the group's Risk Appetite Framework has been revised by lowering the upper level of the target range from 240 per cent to 230v per cent. The group also 'benefits from the introduction of the new accounting standards, with the life business showing steady growth and a more predictable trend'. As mentioned, thanks to rate increases and technical measures implemented in 2022 and 2023, the undiscounted Combined Ratio is expected to remain below 96 per cent during 2024. This is while 'the pure risk and health business contributed significantly to the group's profitability, having accounted for 22% of total premiums in 2022'. From this line of business, the company expects continued growth "thanks to the group's leadership position in personal risk products, its broad and renewed product offering, and its excellent distribution network".

On the occasion of Investor Day, the lion also took a stocktake of its latest two acquisitions. Starting with that of Liberty Seguros, announced in June 2023, which "significantly strengthens the group's market position in Spain and Portugal, complementing Generali's current activities both in terms of product offering and distribution strategy. The acquisition also gives Generali a presence in the profitable Irish non-life market". The deal, it is explained, will boost Generali's profitability and competitive ability, and Liberty Seguros is expected to make a positive contribution to the group's pre-tax result of more than EUR 250 million by 2029, net of distributable excess capital. The other acquisition, announced in July 2023, is that of Conning, which "will allow the group to implement its strategic vision in Asset Management and enter the US market".

Underlying the transaction, it is emphasised, is the strong cultural alignment that emerges in the common approach to the insurance business and in specialised investment expertise. "The long-term partnership with Cathay Life ensures the stability of Conning's assets under management and represents an opportunity to expand the asset management business in Asia. Following the acquisition, the group expects to achieve synergies of between EUR 70 million and EUR 80 million by year five,' the note concludes.