Assicurazioni Generali S.p.A. (G) Earnings Call Transcript & Summary

Good afternoon. I'm the conference operator for Chorus Call. We're glad you could be with us for the Generali Group half year 2026 results presentation, and welcome. Just a reminder that everyone is in listen-only mode for now. Following the presentation, you'll have a chance to ask questions. If you need help at any point during this call, you can reach an operator by pressing star and zero on your phone. Now I'll hand the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Sir, the floor is yours.

Hi, everyone, and thanks for being on our first half 2026 results call. Joining us today are Group CEO Philippe Donnet; Deputy Group CEO Giulio Terzariol; Group General Manager Marco Sesana; and Group CFO Cristiano Borean. Before we open it up for Q&A, I'll pass things to Philippe for a few opening remarks.

I appreciate the opportunity to speak, Fabio, and I want to thank everyone for being on this call. Once again, Generali's outstanding financial results for the first half of 2026 show the strength, profitability, and very solid capital position of our group. We are now at the halfway point in executing Lifetime Partner 27: Driving Excellence, and these results strengthen our confidence in our capacity to successfully deliver our fourth strategic plan in a row. I will concentrate on five key messages. First, we delivered a strong performance across all key metrics, thanks to the robust contribution of every business segment. Gross written premium came to €53.4 billion, an increase of 5.8% from half-year 2025, driven by both life and property casualty. The operating result saw excellent growth to €4.5 billion, up 11.2%, again thanks to all business segments. This produced a 13.7% improvement in the adjusted net result to €2.5 billion, which led to adjusted earnings per share growth of 14.3%. Thanks to our sound capital generation, we end the second quarter with a very solid Solvency II ratio at 216%, notwithstanding the impact of the €500 million buyback and the end of the subordinated bond grandfathering regime. Second, our life business kept up a very positive growth trajectory, with the operating result rising to €2.2 billion, up 8.8%.

We saw very strong net inflows, coming in above €8.3 billion. That marks a record for a first half, and it was delivered thanks to positive contributions from every business line. New business value climbed significantly, up 21.1% to €1.9 billion, helped both by higher volumes and by better overall profitability. Our new business margin widened materially to 5.86%, driven mainly by the favorable impact of a better new business mix and improved product features. Third, the property and casualty operating result increased 4.7% to more than €2.1 billion. That came despite an extra core? €425 million in natural catastrophe and man-made claims relative to the first half of 2025. The combined ratio came in at 91.5% versus 91% at half-year 2025, with NatCat accounting for a 3.6 percentage point impact. The natural catastrophes seen this year, among them the recent severe wildfires in Spain and France, underscore even more how important it is to close protection gaps and strengthen climate change preparedness around the world. For July 2026 on its own, our preliminary assessment is that NatCat affected our business by roughly €300 million, plus approximately 60 additional million euros tied to man-made events. Beyond large-loss events, the present inflationary trend is another factor we will take into account in our pricing, especially in non-motor.

Fourth, asset and wealth management posted solid expansion in operating result, up 31.3% versus a year earlier. Both asset management and Banca Generali contributed through strong underlying performance. That segment accounted for roughly 16% of the group operating result, which highlights how a diversified, integrated business model pays off. Turning to my fifth and last point: since executing and delivering our plan stays at the top of our priorities, we're also continuing to build out our capabilities in the key growth areas of our strategy. On that note, let me spend a few words on Radian, the new brand for a global care platform. Radian unites leading capabilities in employee benefits, assistance, health, and mobility, and it serves multinational companies, financial institutions, and millions of customers worldwide. Its annual business volumes exceed €5.8 billion, it has more than 12,000 employees, and it operates in over 190 countries. In this field, Radian ranks among the very few genuinely global players — it is the leading employee benefits network and the second-largest player in travel insurance and assistance. We aim to build further on those leadership positions and to become the world's premier care partner. Radian distinguishes itself through its scale as well as its technology.

This is an insurtech platform powered by data and AI, one that merges Generali's scale and strength with the speed and creativity of top digital companies. On that foundation, we're now expanding embedded insurance — a fresh B2B2C growth engine delivering seamless protection inside our partners' digital journeys, spanning travel and e-commerce through to financial services. That lets us convert our worldwide distribution ties into a new and ever more valuable wellspring of profitable growth. Long-term structural growth drivers work in our business model's favor: growing appetite for travel insurance and assistance, employee benefits, and embedded and integrated service ecosystems. That's exactly why we feel genuinely confident and enthusiastic about what lies ahead for Radian, and naturally we'll give you regular updates as it develops. To wrap up, how well we performed during this year's first six months mirrors disciplined execution across our three key strategic priorities: excellence in customer relationships, in core capabilities, and in our group operating model. What's more, the insurance sector trends our plan is built on are showing themselves to be ever more relevant, with a few of them even speeding up. That holds especially for new needs stemming from major long-term social and environmental shifts, among them an aging population and insufficient public health care; the protection gap tied to more extreme weather events caused by climate change; and shifting customer expectations propelled by market and technological change.

This setting keeps shifting all the time, so we have to remain nimble, keep innovating, and think ahead — that way we can lead and provide enduring value both to our customers, as their partner for life, and to every stakeholder as a standalone group. Three foundations support the plan, and they matter greatly here: our skilled workforce, together with the disciplined rollout of AI and data, is enabling our business units to reinforce core technical strengths in underwriting, while also delivering further gains in service quality for customers and distribution partners. On top of that, we keep showing how solid and consistent our sustainability work is. The Financial Times just named us among Europe's climate leaders, and Time and Newsweek put us in their rankings of the world's most sustainable and greenest companies. Such meaningful recognitions fill us with pride and push us to keep pursuing profitable growth even harder, while backing a green and just transition and building stronger societal resilience. Last, before we begin the Q&A, I have some good news: on November 18th we'll host an Investor Day in London. There we can give you another update on how our plan is being executed and also present several of our strategic initiatives in detail.

In the next few weeks, you'll get all the specifics, and we can't wait to see you there. Once more, many thanks for the ongoing interest you've shown in Generali; my colleagues and I are now glad to take your questions.

Thank you. Speaking is the Chorus Call conference operator. Our question-and-answer session starts now. If you'd like to pose a question, press star and one on your touchtone phone. Should you want to drop out of the queue, press star and two. We ask that you please use handsets while asking questions. At this point, anybody with a question can press star and one. Michael Huttner of Berenberg has the first question.

Great, thanks a lot. I've got two questions — one's a bit cheeky. On the previous call, I believe Giulio mentioned that he takes the metro fairly regularly over to UniCredit to talk business, sales and that sort of thing. Naturally, Allianz is reporting today as well, and unfortunately for them, they've lost the UniCredit franchise. Is that the one you'll be picking up, or do plans exist on that front? Whatever you could share would be quite interesting. The second one is more standard. You mentioned inflation and pricing. Could you give us some figures on the inflation we're seeing? My sense is that inflation has picked up while pricing still lags, but I don't know how you're viewing it. Thank you.

Thanks a lot, Michael. I’ll start with a question for Philippe, and then I have a second one for Giulio and Marco.

Hold on, my apologies, Philippe. What I actually said wasn’t that I visit UniCredit frequently. My point was that UniCredit, Allianz, and Generali are separated by five train stops. That’s the distinction, all right? No,

We already conduct a substantial amount of business with UniCredit — that includes bancassurance distribution across Central and Eastern Europe, plus some asset management business too. Without question, we'd be glad to grow what we do with them, and we'd likewise be glad to look into any other sorts of business opportunities, whether in Italy or outside Italy.

Alright.

Regarding pricing conditions, here’s what we observed during the first six months. In motor, pricing is essentially holding up quite well relative to the risk premium, and we have a modest positive spread. Turning to loss trends, inflation is broadly consistent with last year’s level. We’re talking about inflation running between 4 and 5%, though frequency is also declining. You may recall that in the first quarter we mentioned frequency had risen somewhat, but that also reflected the difference in weather-related events between the first quarter 2026 and the first quarter 2025. With the six months now behind us, we’re seeing that normalization. On inflation, I’d say it is very stable relative to last year. On frequency, I’d also say we are still seeing a decrease. In non-motor, generally the same picture. There is just one country where we observe a slight uptick in non-motor inflation, and that is Germany. We discussed this as well, if you remember, at the end of June, and we are implementing rate increases.

As a reminder, the non-motor combined ratio in Germany sits well below 90 — that's a very strong result regardless. As ever, we do our best to hold on to as much of the margin as possible.

Perhaps I should add a few words. We're keeping a close watch on every factor that could drive inflation. We're tracking all the spare parts throughout Europe, throughout each brand, throughout Asia. We examine the various drivers. We examine the medical rates to see whether they are rising. Right now, as Giulio said, we generally observe that the market is steady in how we see inflation, at roughly that 4% Giulio mentioned. Inflation could appear. We are watching. We don't see it yet. We are getting ready, and we know that the moment we see inflation, we know how to respond. Incidentally, I also want to remind you that in non-motor, a big portion of the portfolio is indexed to inflation, so there is also what I would call an automatic recovery we can make. At present, we see that the market anticipates that, but we don't see it yet in our portfolio. We monitor and watch, and we know how to act if we see any sign of inflation.

That's great. Thanks so much.

Thanks, Michael. Let’s take the next question.

Our following question comes from Fahad Changazi at Kepler Cheuvreux.

Thanks for taking my question. I’d like to follow up on P&C and inflation. In Q1, you also mentioned that a decision about volume growth in P&C would be made in H2. It seems Germany is sort of the exception, but when it comes to other countries, where do you stand on P&C volume growth? My second question concerns capital. The SCR rose in both life and non-life. Presumably, that reflects normal business growth. You still ended up with a very strong Solvency II ratio for year ’26, and the Solvency II review is on 30th January. Is it fair to say you will reassess your capital levels at full year results? Also, I suppose, will you still want to operate near the top end of the range? Thank you.

Thanks a lot, Fahad. Giulio, the first one’s for you, and Cristiano, the second one is yours.

On the volume growth question, let me start with motor and non-motor taken together. In motor, I'd put roughly 20% of our growth as coming from volume — actually slightly under 20%. For non-motor, which also includes accident, health, and disability, we're talking about nearly 1/3 of growth attributable to volume. Turning to geography — and here I'm still on motor — volume is developing nicely pretty much everywhere. There are only, I'd say, three exceptions. The first is Switzerland, since we're doing substantial pruning there, and the combined ratio improvement you can see is remarkable. Spain is another, where pruning is likewise underway and we're reaching a different, better combined ratio level. Then in Italy, comparing this quarter and these six months with the same six months a year ago, you'll see a decrease. In reality things are stabilizing, and this brings us back to the point that we're clearly managing both volume and profitability, seeking the right balance, and our motor book in Italy is performing very well.

And I'd say across all the other countries as well, you're seeing decent, solid volume growth. On the non-motor side, growth is visible pretty much everywhere, except for Switzerland, where we're doing a lot of pruning, obviously, and there too you can see the improvement. Broadly speaking, from a volume standpoint, there's clearly momentum, and it's stronger than what we had a couple of years back.

On the capital question, hi, Fahad. What you're picking up on, I believe, is the drive toward business growth, as we mentioned earlier. Obviously it depends on the mix of that growth too — when you get what we saw in net inflow, particularly across this half year, with an even spread among all the lines, where traditionals tend to absorb somewhat more capital. That also accounts for a portion of the capital deployed into new business, which fits with the favorable backdrop and the future investment for expansion that we have ahead of us, already anticipating the Solvency II review. Let me restate that at the end of January 2027, when that Solvency II review takes effect, we'll get a 15 percentage points uplift. Certainly, on the final '26 result, we will present a comparative starting point, which I believe is standard practice across the whole industry. We talked it through jointly, I think, at the forum as well. On the risk appetite framework level, we reaffirm the level from the Generali Exploring event of March, as we discussed. Our floor top ceiling element at 230 remains confirmed. Our intention is to deploy this capital in four forms.

To say it again: through SAA optimization we're already using a bit of capital, on the order of 2 points each quarter. This quarter we did somewhat less, since the positive rates environment meant there was no need to go out and get the target reinvestment result, pushing further into risky assets, but generally we're pointing toward 2 points per quarter of SAA optimization. There was also a small Belgium downgrade event, which had a 0.5 percentage point negative impact on solvency. All in all, we'll keep deploying those extra points across 4 drivers: the first is business growth, which we're already starting; the second is investment SAA, as you mentioned, and we'll keep investing in the business, in infrastructure in Europe and overall; and the third for sure will also let us achieve a better mix between subordinated debt and senior debt, which isn't as necessary now for capital as it was in the past; and fourth is for sure capital deployment, whether for growth, for M&A, or for sure returning capital to shareholders.

Thanks a lot.

Appreciate that, Fahad. Let's take the next question.

Our next question comes from William Hawkins at KBW.

Hi, everyone, and thanks for taking my question. I’ve just got one topic, with a few questions, please. Could you expand a bit on how you see the outlook for new business value? In my view, you’ve reported a very strong figure, €1.89 billion. Just over the very short term, can we annualize that, or might there be some variance in the second half? And then what are you thinking about in terms of the longer-term drivers? I always feel a big company like yours ought to be growing that number 5 to 10%, but I don’t know whether I’m off-base on the upside or the downside. If you could say a bit about the drivers, because I noticed in the detail that Asia seems to have had a huge step up, which is great; Germany’s a bit weaker; and Italy and France are in the middle. Just help me on the outlook for new business value, please.

Thanks a lot, William. Giulio gets the first question, and then the second one goes to both Giulio and Marco.

Thank you, William. Regarding new business value, I wouldn't suggest taking that figure and multiplying it by two, since in China especially, production is considerably stronger during the earlier portion of the year. Some of this always occurs because it ties to Chinese New Year — a great deal of production essentially takes place in the first quarter. Then, in this particular case, there was also a bit of a fire sale effect stemming from an illustration rate change in the second quarter. So from that angle, China needs to be normalized when looking at growth. Apart from that, the remainder of the portfolio is actually performing fairly normally. There's one more factor worth keeping in mind. It's true that this isn't the business with the highest new business margin among what we have, yet the protection business in France, which does generate new business value, is especially weighted toward the early part of the year. So from that perspective, I wouldn't take the number and multiply by two, but I can assure you that our VNB growth will be far stronger than last year's, and we will certainly hit your objective for this year of 5 to 10% value of new business growth.

For this year, it will most likely be significantly higher. Looking ahead, I’d say Asia is clearly going to be one driver of growth in our value of new business. And by the way, Asia isn’t just China. Our franchise in India is growing as well. I’m not sure whether you recall, but essentially we brought in a new joint venture partner last year. That partner is a bank. Although bancassurance isn’t exclusive in India, we clearly gain access to this bank’s branches. I can tell you that in India we also saw a nice increase in present value of new business profit, as well as in value of new business. Marginality in India is roughly 7% at the moment, and for the six months we are writing about €250 million in present value of new business premium. That’s another point to keep in mind, because I expect growth here going forward. Now back to Europe. We definitely observe good momentum in France. I can’t promise this will continue indefinitely, but I would expect strong results out of France in the months ahead or next year as well.

From a VNB standpoint, Italy is performing quite well. In Italy, although the present value of new business premium has declined, the value of new business growth stands at 5%, which is certainly a solid starting point. And then, of course, the situation in Germany will eventually return to normal. From that perspective, I'd say Asia is clearly out in front when it comes to growth, but in Europe as well, I believe we have a strong franchise, and we will push to achieve quality value of new business growth.

There are a few things I think are worth bringing up. First, obviously we're seeing Asia develop, but also if we come back to Europe, demographic trends, pensions, and what people in this segment need will be a significant driver for us going forward. I'd say both Germany and Italy, but CEE as well, are going to matter. Second, the way we've structured the products we've built over the years — we always talk about our hybrid product, our multi-line product. The capacity for protection to keep growing within that product will drive the sustainability of the new business margin, and therefore of new business value. As Giulio already noted, we've always made choices, and when there's a trade-off, we've made those choices on value. For instance, you can see how strong value development was in Italy despite the drop in volume. That's the kind of choice we always make. To sum up, demographics, pensions, and the type of product we bring to market will be core drivers of sustained value growth going forward.

That’s interesting. Thank you, gentlemen.

Thanks, William. Let's take the next question.

Our next question comes from Andrew Baker at Goldman Sachs.

Hello, and thanks for taking my questions. First, I suppose, given how strong investment performance was in the second quarter, has anything changed with either the operating investment guidance on the life side or the investment result guidance you gave earlier on the P&C side? Second, I suppose, just stepping back, adjusted EPS grew 16% last year. It's up 14% in the first half this year. Obviously there's no change to your targets at this point, but is it fair to assume that you'll come in materially above the top end of the target range for both '26 and, I guess, the three-year target as well, just based on where we're sat today? Thank you.

Thanks, Andrew. Both of those questions are directed at Cristiano. Yes.

Hi, Andrew. On the P&C effect in the second quarter first, you've seen a very positive recurring growth in the investment result even though there was a reduction of dividend from our private equity side, but we confirm the guidance given of €1.1 billion so far. That's a proof point of the very good reinvestment activity done there, together with the growth of the business. On the life side, I think especially in the second quarter in isolation, there were €25 million more, while in P&C there were €24 million less. Here, there are €25 million more on Lion River dividends and kind of €20 million more of dividends from the funds in China, which are more a kind of timing shift. That's why we still stick to the €900 million operating investment result for life as well. Going to the second question related to adjusted EPS, we are not changing target, but we are hinting that we are confident that given this momentum, we will overachieve our target, and I think that this is the most important thing out of it, and it is not the first time we are saying it.

Thanks a lot. Appreciate it.

Thanks, Andrew. Let's take the next question.

Andrea Lisi from Equita has the next question.

Hi there, thanks. Good morning, and I appreciate you taking my questions. My first question concerns the speculation reported in the newspapers regarding a potential merger involving the Generali Italian network and Alleanza — if you could share any views on that, and whether you believe it could speed up synergies and business development, and also potentially widen the scope of collaboration with Banca Generali. The second question is about new business margin. We've observed a very positive trend, and I'd like to know whether you think we can exceed the guidance you've given to date. Then, if possible, could you give us some indication of your full-year expectations for net other non-operating expenses, which have fallen quite substantially compared with the prior year — any thoughts on that would be welcome. Thank you.

Thanks so much, Andrea. Regarding your first question, as usual, we don’t make any remarks about articles, rumors, or speculation. Giulio will handle the second question about the new business margin, and Cristiano is going to take the third one on non-operating items.

Apologies, everyone. Yes, regarding the new business margin, it's obviously a positive step. Incidentally, I'd like to highlight that this comes partly from a solid improvement in Italy's new business margin, and the margin trend in Asia is also quite encouraging. For the current year, I'd say we will certainly land at the guidance we provided. We've mentioned repeatedly on recent calls that our focus isn't strictly on that 6% new business margin. What matters more to us — echoing what William said earlier — is the growth in new business value. If circumstances require accepting slightly lower new business margin in order to generate additional growth, additional new business value growth, then that's what we'll do. Let me illustrate. Suppose your target is a 6% new business margin — then anything under 6% new business margin could look dilutive from that perspective. In theory, we'd end up having to forgo perhaps business written at 4 or 5% new business margin purely to preserve that 6%. From that standpoint, that isn't necessarily the wisest approach.

Yeah, we're essentially at that 6% mark. We could keep it there, but if opportunities arise to push new business value higher, then we'll gladly move somewhat off that 6% figure.

Yes, Andrea, on the net other non-operating expenses — as you probably remember, we held the Exploring Generali event on finance in March. At that time we provided, let's say, range guidance of €200 to €300 million for those specific other non-operating net expenses. Clearly, please keep in mind that this type of item is fairly erratic by nature, and usually it also has a seasonality skewed toward the fourth quarter. Also, don't forget that we are working — and that is why you are seeing this reduction — on an allocation, and we already did this in the past, moving more than €80 million of cost out of that item, which has now been split evenly between life and non-life operating. We are continuing this journey of extreme rigor around that, to really keep a much lower capability to use that item, so as to concentrate all the operating result impact of all the loading and charges, apart from very, very specific topics. There is also another part running in parallel to that, such as the amortization of intangibles. The more you carry out activity of growing the business, like we did last year when purchasing the asset management company MGG, we have amortization of intangibles for the client value part in it, which is also part of the non-operating overall result.

Thanks.

Appreciate that, Andrea. Let's take the next question.

Our next question comes from Gianluca Ferrari at Mediobanca.

Yes. Hello. Good afternoon, everyone. My apologies for returning to Andrea's question about the net other non-operating expenses. If I remember correctly, in the fourth quarter of last year, you had quite a few early retirement plans that had an effect on this line. Do you expect another sort of round of early retirement in Q4 of this year? The second one is about cat losses — if you could provide a bit more detail on the €300 million you mentioned, and whether you can offer some kind of guidance on the cat budget for full year 2026. Thank you.