MILAN--Assicurazioni Generali SpA (G.MI) said Thursday its net
profit for the year dropped by around 89% as the insurer was hit by
large impairments in the fourth quarter.
Net profit for 2012 was 90 million euros ($116.6 million),
compared with a net profit of EUR856 million for the previous year,
it said.
It said the result reflected a raft of impairment charges taken
over the year of 2012 of EUR1.7 billion. Generali wrote down the
value of its available-for-sale securities by EUR792 million and
its investment in Telco--a holding company that owns the largest
single stake in Telecom Italia SpA (TIT.MI)--by EUR148 million in
the fourth quarter.
It said it also impaired the value of loans and receivables by
EUR118 million, real estate assets by EUR56 million and other
assets by EUR156 million in the same period of last year.
The company said that the impairments follow an assets review
triggered by the strategic plan put in place by Chief Executive
Mario Greco over the last months.
"We have recently outlined a new strategy, built on introducing
discipline, simplicity and focus across all our activities. We are
simplifying our structure and adopting a more disciplined approach
to managing the Group and its investments, as we refocus on our
insurance business," Mr. Greco said in a statement.
Generali said its board proposed a 2012 dividend of EUR0.20 per
share, the same as the previous year.
Total premiums were up 3.2% on year at EUR70 billion.
The company's overall operating result was up 10.5% at EUR4.2
billion in 2012, while its operating result in the life sector rose
9.7% to EUR2.7 billion in 2012, driven mainly by savings products,
the company said.
Its non-life operating result was up 5.6% at EUR1.7 billion in
the year.
As a result, the combined ratio--a percentage of premiums spent
in claims--improved to 95.7%, from 96.5% at the end of 2011.
Operating results in financial services were up 21.7% to EUR408
million in the year, helped by the good performance of asset
manager Banca Generali SpA (BGN.MI), the company said.
Generali said its Solvency I ratio rose to 150%, from 117% at
the end of 2011.
Write to Giovanni Legorano at giovanni.legorano@dowjones.com
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