News...letter GENERALI GROUP NEWS. Mar- Apr In this issue GENERALI GROUP NEWS

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1 Results as of 31st December 2013 MILAN, ITALY At a meeting chaired by Gabriele Galateri di Genola, the Board of Directors of Generali has approved the consolidated financial statements and the parent company s draft financial statements for has been the first year of the Group s three-year turnaround plan during which Generali has taken steps towards the rebuilding of profitability and capital solidity. The Group has also re-focused on its core insurance business, through the disposal of non-core businesses and the investment to acquire full control of strategic activities. Furthermore, it has strengthened its governance by creating a simpler and more effective organization. The progress achieved over the year in the turnaround of the business allowed the Group to register a boost in profitability despite an uncertain economic recovery, low interest rates and high natural catastrophe losses. Generali closed the year with an operating result of 4,207 million (+5.3%; 3,994 mln FY12) reflecting growth in all the lines of business. These results helped Generali reach a net result of 1,915 million ( 94 mln FY12), derived entirely from operating performance, the highest of the last 6 years. Taking into account the proceeds of disposals and the gain on the Group s stake in the Bank of Italy2 which have been offset by extraordinary negative impacts on Telco (- 189 mln), BSI (- 217 mln) and other items, the overall impact of these one-offs is broadly neutral. A dividend per share of 0.45, more than doubled relative to last year ( 0.20 FY12), will be proposed to shareholders at the AGM by the Board of Directors. The total dividend on outstanding shares will amount to 700,592, The dividend will be paid on May 22 nd, 2014 and the record date will be May 21 st, Shares will trade ex-dividend as from May 19 th, The Generali Group CEO, Mario Greco, said: 2013 has been a fundamental year for the turnaround of Generali and the results confirm that we are on track, or ahead, of the targets in our strategic plan. For the first time, after many years, our net result derives entirely from our business operations rather than being impacted by one-off items. During the year we have made deep changes to the Group. In particular, we have disposed of 2.4 billion of non-core assets and acquired minorities in strategic areas for 1.5 billion. We have strengthened the management structure and simplified the Group s governance, which is now in line with international best practice. Over 2013, we generated a total shareholder return of 26%. These results and the more than doubling of our dividend confirm we are on the right track. We are aware that a lot still needs to be done to reach the targets we set ourselves. In 2014 the debt will be reduced further and significant cost savings will be achieved. We estimate to improve the operating result and the net profit further, in line with the plan that aims to gradually increase the profitability for our shareholders. Highlights of the Full Year 2013 Results Operating result rose to more than 4.2 bln (+5.3%) Net result bln ( 94 mln FY12), the highest of the last 6 years Dividend per share 0.45, more than doubled ( 0.20 FY12) Strong improvement in cash generation. Net Free Surplus up to 2.1 bln (+38%), already above the 2015 target Significant progress made towards 2015 targets: Operating RoE increased by 80 bps to 12.1% (2015 target: >13%) Solvency I ratio approximately 150% as of end of February, on track with the >160% 2015 target (141% FY13) Debt reduced by 500 mln with an 80 bp improvement of the debt leverage ratio to 39.6% (2015 target: <35%) Improved operating results in Life (+4.3%) and P&C (+3.5%). Stable premium income at 66 bln 1

2 at A- following global criteria change Recently the rating agency S&P has affirmed the Generali rating at A-. This decision resolves the CreditWatch in which the agency placed Generali last November. The Group was tested against a hypothetical default of Italy and proved that its regulatory solvency capital would remain positive in such a scenario. According to the Group CEO Mario Greco, the rating affirmation is a substantial achievement for Generali and a validation of the excellent progress Generali is making in its strategy of rebuilding solvency, reducing leverage, and improving profitability. Highlights of Insurance Financial Strength as at March 3 rd Barcelona Share to win BARCELONA, SPAIN. On April 2 nd to 4 th 2014, Generali reunited in Barcelona more than 200 Global Leadership Group (GLG) members to discuss business opportunities and share best practices. The event was built around the concept Share to win. Building on own assets to grow in business, profitability and size with an agenda that included on-stage presentations and breakout group sessions, to involve all GLG members, coming from over 40 countries around the globe. 2

3 The meeting successfully served as a platform for GLG members to facilitate the dialogue, and to exchange business and personal experiences in order to identify concrete ideas and approaches to be spread across the Group. Group CEO Mario Greco underlined that the concept of sharing is key because there are excellent examples everywhere in the Group and it is of fundamental importance to know and share the skills and capabilities of Generali people. The meeting has been an opportunity to meet but also to start understanding what are the strengths and expertise this organization can leverage on in the future. The event was also an opportunity to comment the drivers for 2014 and think of how the Group s culture, can help the execution of the Group s strategy. The Group CEO s visit in Thailand BANGKOK, THAILAND. Mario Greco, Group CEO visited Generali Thailand s operations in Bangkok on March 3 rd and 4 th. He first met with Asian Countries CEOs and the top management of Asia Regional Office, and had a meeting with the key talent in Generali Thailand. In this occasion, Mr. Greco presented the Generali Group s strategy, highlighting the results achieved so far by the Group and the challenges and goals ahead. He then discussed with the Asian countries CEOs about the growth plan and business update of Generali operations in Asia. In addition to Mr. Greco s presentation, a staff cocktail was another major highlight of his Bangkok visit. The cocktail served as an occasion for Generali Thailand s staff of interaction closely with Mr. Greco and the management team of Asia Regional Office. Mr. Greco with Asian Countries CEO and the top management from Asia Regional Office. (Photo credit: Corporate Branding, Advertising & Public Relations Department : Generali Thailand) Mr. Greco interacted with Generali Thailand s staff in a cocktail. (Photo credit: photo credit: Corporate Branding, Advertising & Public Relations Department, Generali Thailand) 3

4 Launch of We Generali Portal in Asia Recently the WE GENERALI Portal, a unique worldwide communication channel, has been launched in Hong Kong, Japan, Indonesia, Philippines, Thailand and Vietnam for the development of a shared and widespread culture. In 10 months the Portal has connected almost all Generali Group colleagues worldwide. The Portal contains information and news from the Group, organization charts and internal memoranda, a global address book and job opportunities. In the first level menu you will find the following sections: About us, Market and Products, Communications and People. You can browse the most important news regarding the Group, enriched with multimedia contents in the totally renovated We, Generali News section, an evolution of the ilbollettino.com news platform. Check all the new Portal updates in the What s Up box! In addition, a Suggestions box is available to your proposals to improve the Portal. 4

5 profit of Rs crore at the end of Q3 INDIA - Future Generali India Insurance has posted a profit of Rs crore for 9 months ended 31 st December The gross written premium for the period stood at Rs. 944 crore as against Rs. 855 crore for the same period last year. The company has reported positive business growth both Q-o-Q and Y-o-Y. The total premium collection for the quarter stood at Rs. 319 crore as against Rs. 307 crore last quarter. The company s total premium collection for the same quarter in FY12-13 was at Rs. 281 crore. So far in the April to December period of FY13 14, Future Generali India Insurance sold more than 7 lakh policies, as opposed to 6.45 lakh policies during the same period last year. The claim settlement ratio also saw year on year increase to 91% this year. The company s total funds under management as on December 31st, 2013 stood at Rs. 1,460 crore. Commenting on the quarter results, K.G. Krishnamoorthy Rao, CEO, Future Generali India Insurance said, Though this year has been a challenging year due to the general slow down in the economy, we expect to close the financial year with a Gross Written Premium of nearly Rs crores. We have seen a balanced distribution of business across geographies and lines of business. We have concentrated on correcting our business mix in addition to expanding our agent base. Some of our business lines such as motor, health and the newly launched agriculture insurance have done quite well. premium growth in 2013 MANILA, PHILIPPINES - Generali Philippines (GP) demonstrated exceptional 2013 results by registering 45% growth in individual recurring premium sales on March 17 th. New individual sales revenue increased by 34% during the same period. Meanwhile, individual renewal premiums grew at a healthy 54% clip, a result of the Company s continuing bancassurance strategy that focuses on sales of regular premium products. Premiums for the Group Life and Health business remained steady with 11% increase in total premiums. Generali Philippines tailors its value proposition according to the unique needs of the various market segments. The Company offers a wide range of products for clients looking to create individual savings programs and to protect their family s lifestyle. For High Net Worth individuals who are concerned about wealth transfer, GP provides insurance-based tax funding solutions that supplement their estate planning programs. For institutional clients, the Company maintains a dedicated team of experts who are wellversed in customizing plans that address the specific life and health requirements of SMEs and multinational companies via GP s hospital network nationwide. In 2013, the Company beefed up its individual product portfolio with the launch of various products. Money8 Secure which provides traditional increasing life protection with guaranteed cash payouts and maturity benefits, as well as recurring premium unit-linked products - ValueFlex Secure and SaveFlex Secure. Two additional variants, ValueMax Secure and WealthFlex Secure, were introduced the following year to expand the range of product options. These unit-linked products provide insurance protection while allowing the policyholder to choose among several investment funds according to their risk profile. These funds are managed by BDO Trust and Investments Group, further cementing the bank partnership. The outstanding 2013 performance is the result of excellent support of BDO, our partner bank, and worldwide insurance leader Generali Group, complemented by the commitment and dedication of the GP sales force, said Renato Vergel de Dios, Generali Philippines President and CEO. 5

6 For 2014 and beyond, Generali embraces a robust business strategy that will allow the management team to be more comprehensive and responsive with its strategic initiatives. The potential game changer will be GP s aggressive strategy to expand its sales force to 700 highly productive Financial Advisors to keep pace with BDO s continuing branch expansion. Along with the continued support of our bank partner, BDO, the Generali Group and the wider range of relevant insurance solutions in place, the Company has all the necessary enablers to further intensify its industry presence, Vergel de Dios commented. Insurance Sales Platform CHINA. With the growth of internet technology, the border of traditional financial industry is widening and the insurance industry is changing accordingly. According to statistics from the recently published Internet Insurance Industry Development Report, the number of domestic companies who have online insurance sales service is increasing from 28 to 60 during , and the number of clients is growing by 566%. To adapt to the new trend, GCL officially launched the online insurance sales platform ( shop/), providing clients the brand-new purchase channel and service experience. The characteristics of this online insurance sales platform developed by GCL include easy insuring, convenient buying, environmental friendly, supporting multiple devices (PC, Tablet, Phone) and so on. Clients only need four steps to complete the whole process from product selection to insurance policy received. Apart from that, clients can pay the premium through Alipay. After the payment, they can immediately receive the electronic insurance policy, making the whole process faster, greener, more convenient and easier to save the insurance policy. At present, GCL has introduced two insurance products: GCL traffic accident insurance and GCL Overseas travel accident insurance. GCL traffic accident insurance is designed specifically for people who love driving. Clients could enjoy worry-free travelling with paying only 99RMB per year (member price 79RMB/ year) and a RMB 1 million worth of aviation accident insurance as a surplus. GCL Overseas travel accident insurance provides overseas travelling clients with 24 hours per day, 7 days per week protection, including clinic, hospitalization, emergency rescue and so on. GCL reminds clients that always use the accurate personal details and contact information while filling in the forms online to avoid unnecessary loss. Our company is committed to the concept of the technical GCL and building the competitive advantages of innovation of technology and service. The launch of online insurance sales platform is a new beginning of offering clients the combination of professional insurance service and better insurance experience. 6

7 Our Activities GENSOCIETY GENCULTURE Generali in China, India, Hong Kong, off for one hour against the forces of climate change WWF s Earth Hour TM 2014 took place on 29 th March at 8:30pm (local time). This year, Asia Regional Office, Hong Kong Branch, Future Generali, Generali China Life and Generali China Insurance, Japan Branch and Generali Vietnam jointly participated in this green initiative, together making this green initiative an Asian Corporate Social Responsibility event. Earth Hour is the world's largest collective environmental action, involving individuals, communities, businesses and governments across the world. This collective lights-off action sends a powerful message: everyone wants a sustainable future. Hong Kong Branch has promoted among its staff Earth Hour since To further support and promote WWF Earth Hour 2014, the Branch pledged to support this green initiative by turning off all the nonessential lights for one hour on 29 th March, and encouraged staff members to support the initiative as individuals. Swire properties, the landlord of Generali Tower, the office building in Hong Kong, also decided to turn off all the non-essential lights in the whole building to support this event. For the first time Japan Branch and Generali Vietnam supported the WWF Earth Hour to show its Community commitment to combat climate change. Future Generali for the second consecutive year pledged to switch off the lights to support WWF Earth Hour 2014, and prompted all employees to participate in this earth-saving endeavor by circulating an internal communication to both the life and general insurance companies. For the third consecutive year Generali China Insurance and Generali China Life encouraged all their staff members to support WWF Earth Hour GCI circulated an invitation to all staff, and GCL invited their staff and customers to participate through the social media channels. In response to WWF-China s call to action, the companies promoted The Blue Sky Project, which aimed at arousing public concern about air pollution in China and working on some solutions to improve air quality. You may find the event details via Future Generali s er and WWF Earth Hour posters for China. 7

8 awarded: Caring Company HONG KONG. Recently the Hong Kong Council of Social Service (HKCSS) awarded the Caring Company Logo to Assicurazioni Generali S.p.A. in Hong Kong. Generali has been awarded for the second consecutive year in recognition of its commitment in Caring for the Community, Caring for the Employees and Caring for the Environment over the previous year. To qualify as a Caring Company, the company must fulfill the following minimum requirements: being nominated by at least one local non-profit charitable organisation and fulfil at least two criteria from each of the three scopes identified by the HKCSS i.e.: Caring for the Community, Caring for the Employees and Caring for the Environment. Thanks to the second edition of Generali Rainbow Life Supporting Project associating Assicurazioni Generali Hong Kong Branch and the Boys and Girls Clubs Association of Hong Kong (BGCA), BGCA nominated Assicurazioni Generali S.p.A. for the scope Caring for the Community (i.e. volunteering and giving). Moreover, the company was recognized to fulfil the scopes of Caring for Employee (i.e. Recognise employees as an important asset and well established communication mechanism), and Caring for the Environment (i.e. Eco-friendly manufacturing processes and reduce carbon emission). Launched by The Hong Kong Council of Social Service (HKCSS) in 2002, the Caring Company Scheme aims to foster strategic partnerships between the business and social services sectors to promote good corporate citizenship and create a more inclusive society. The Scheme also helps corporations and social services organisations to know and understand one another at a much deeper level. This will create more room for working together to develop cross-sector community projects that focus on the needs of the community. Further details on the selection criteria can be found at Hong Kong Branch participated in 2014 The Asia Regional Office and Hong Kong Branch are always at the forefront of caring for the environment. For the third consecutive year, the companies supported Lai See (Red Envelopes) Reuse and Recycle program 2014, an environmentally friendly initiative organized by Greeners Action, a Hong Kong environmental group to encourage the public to recycle Red Envelopes in designated collection points. As a Red Packet Sponsor, the company was one of the recycling points for collection of the used and unused Red Envelopes. (from left to right) Representative from Generali Hong Kong Branch with Mr. Wong Kam-Sing, the Secretary for the Environment of HKSAR, and Mr. Angus Ho, the Executive Director of Greeners Action. (Photo credit: Greeners Action) In Chinese and many Asian societies, Red envelope -known as hóngbao in Mandarin, Lai See in Cantonese, Sae Bae Don in Korean, and Lì Xì in Vietnamese- is a monetary gift given during 8

9 special occasions like weddings and the Lunar New Year. The envelopes are red the color that, symbolizes good luck and is supposed to keep away evil spirits in the Chinese tradition. During the Lunar New Year, mainly in Southern China, red envelopes are typically given by the married to the unmarried, most of who are children. Brand new notes, usually in an even number, are inserted inside the envelopes. Thanks to the colleagues contribution to this green initiative, two full boxes of used and unused Lai See Packets had been collected from the office. The Lai See Envelopes collected were sent to sheltered workshops of welfare agencies, where students made a simple classification by size, shape and color and finish with stamping Thank you for your reuse on the back of the Envelopes. The Lai See Envelopes will then be given out to the public for free in the following year. Mainland exchange trip GUANGZHOU. For the second consecutive year, ten children sponsored by the Generali Rainbow Life Supporting Project and two volunteers from the Hong Kong Branch together with The Boys' and Girls' Clubs Association of Hong Kong (BGCA) participated in the Mainland China Exchange Program that took place from April 21 st to 23 th in Guangzhou, Guangdong Province in China. The trip is one of the activities organized by the Generali Rainbow Life Supporting Project and aimed at providing the opportunity for the children to gain valuable exposure, and enhancing their self-determination and self-respect by providing voluntary services to underprivileged families in Guangzhou. During the exchange activities between Guangzhou and Hong Kong s primary schools, the children and volunteers shared their experience of living their local lives. Moreover, the children and volunteers visited Zhongluotan Children Services Centre in Guangzhou, where they cooperated with the underprivileged children to make eco-friendly hanging decorations and Chinese dumplings. Generali Rainbow Life Supporting Project is a project associating Assicurazioni Generali Hong Kong Branch and the non governmental organization The Boys and Girls Clubs Association of Hong Kong (BGCA) in an educational program targeting 20 children. The half year project, that has been officially kicked off at the beginning of July, serves 20 children (age 8-14) and their parents living in the Wah Fu and Wah Kwai public estates. The activities include English language workshops, parent-child activities, interested class subsidy, a parenting skill training workshop and a mainland exchange and volunteering program. The Generali Volunteers contribute and support the activities. The profile of BGCA The Boys and Girls Clubs Association of Hong Kong (BGCA), founded in 1936 to help street children with no formal schooling, is today one of the most reputable NGOs in Hong Kong SAR and the largest social service provider for children, youths aged 2-35 and their parents, with 73 service units located across the territory and on the mainland with over 50,000 registered members. With the mission Nurture the Young, Create the Future, the association strives to cater to the changing needs of society and children by providing them and their families with support and services to nurture their growth. You may find the details in Generali Rainbow Life children and volunteers enjoying the trip. (Photo credit: Stephen Kam) 9

10 EVENT CALENDAR WHEN event where Board of Directors Meeting May 14 th Trieste, Italy Assicurazioni Generali S.p.A. has participated in the Integrated 2012? The Integrated Reporting (IR) is a process based on the Integrated Thinking, focusing on the organization s value creation story over the time. An integrated report is a concise communication about how the organization s strategy, governance and performance lead to the creation of value in the short, medium and long term, in the context of its external environment. The Group s Integrated Report for 2014 has been published on March 13 th. Generali Group has participated in the IR Pilot Programme promoted at worldwide level by the International Integrated Reporting Council (IIRC) since Through the IR Pilot Programme, the principles, content and practical applications of IR have been developed, and are being tried and tested by over 100 businesses across the globe, Generali Group included. I think we are pioneers stated Massimo Romano, Head of Group Integrated Reporting - in bringing to life the Integrated Reporting within our Group, and coherently with the Group IR Programme we firstly did a big job within the Head Office, specifically in our department. We do believe continued Romano - the IR is right step forward in the Corporate Reporting evolution which will help us to improve the communication. To achieve all of this, the first question we asked ourselves was: why not use the same concepts embedded in the IR framework to drive a more transparent approach on the communication of our value creation story inside our department, improving therefore our team engagement? Accordingly, the Group Integrated Reporting Team have started internally this journey a couple of years ago, with the 2013 Internal IR finalized last summer while now the colleagues are working on the version for 2014 (scheduled for June 2014). The Internal IR is a report, technically a power point presentation of around 20 slides, focused on the vision, mission and business model of the Group Integrated Reporting department, its performance and the future outlook, all contents being coherent with Generali Group framework. One of the biggest benefit from Internal IR is that we have begun to break down thinking silos inside our own department, Romano said. Now we can leverage continuous innovation and integrated thinking to translate financial and non-financial information into reporting instruments that support our decision-making process within our department and drive the connectivity of information among our people. Romano concluded: I m very proud that we have fostered within our team an environment which encourages personal and professional development in line with the Group values. Additionally, the Internal IR is made by volunteers that on an annual basis are part of the working group in charge of the implementation and writing of the Internal IR. The whole process has proved a great way for everyone to gain greater internal visibility, leading us to work collectively to a better understanding on how our department ultimately contributes to the company value creation process. 10