Generali posts record operating profit in 2021

Italy’s top insurer Generali (MI:GASI), facing a power struggle over its management, said on Tuesday it posted its best operating profit ever in 2021 thanks to the contribution of all of its business segments.

Generali also said it continued to monitor the situation in Russia and Ukraine where it had only a marginal exposure.

Earlier this month, Generali said it would be closing its Russian office and would wind down its Europ Assistance business in Russia.

It is also giving up its seats on the board of Ingosstrakh, one of Russia’s largest insurers in which it holds a 38.5% stake.

“We no longer have any influence on the management of Ingosstrakh”, Chief Executive Philippe Donnet said in a post-results call. He did not elaborate on the future of the stake.

The head of finance Cristiano Borean said the depreciation of the rouble due to the Ukraine crisis brought the market value of the Ingosstrakh stake below its book value of 231 million euros ($254 million).

Last year Generali’s operating profit, the figure most closely watched by the market, rose 12.4% to 5.9 billion euros ($6.5 billion), above an analyst consensus compiled by the insurer of 5.7 billion euros.

Generali is facing a battle over its board composition at a vote late next month.

Its second-biggest investor, construction tycoon Francesco Gaetano Caltagirone, plans to put forward his own candidate to lead Italy’s biggest insurer, challenging the reappointment of chief executive Donnet.

Net profit stood at 2.85 billion euros, up 63.3%, slightly above a consensus of 2.82 billion euros.

The insurer’s solvency ratio, which measures its financial strength, rose to 227% from 224% at the end of 2020, but is below the figure of 233% at the end of September due to the acquisition of smaller rival Cattolica, Borean said. At March 11, the solvency ratio had risen back above 230%, he added.

($1 = 0.9112 euros)