Trascrizione della presentazione video MARIO GRECO, GROUP CEO

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1 12/03/2015 Risultati consolidati al Trascrizione della presentazione video MARIO GRECO, GROUP CEO Media Relations T press@generali.com Investor & Rating Agency Relations T generali_ir@generali.com Good morning, this is Mario Greco, CEO of Generali. Welcome to our full year results for Key messages I am pleased to report that we have produced double digit increases in the operating result in both P&C and Life and a 10.8% growth in the group result. The operations in our core markets of France, Germany, Italy and CEE all made meaningful progress with continued improvements in operational excellence and profits. These results are doubly satisfying because they were achieved in the midst of drawing to a close an extensive transformation of our business. It is thanks to the tireless efforts of our 77,000 people around the world that: - we were able to bring an ambitious three-year turnaround plan to a successful conclusion one year ahead of plan; - we are able to today confirm that the Generali which had previously been lacking in clear strategic focus, poorly capitalised and unable to consistently deliver top quartile profitability has become an organisation with discipline, simplicity and focus, having restored its solvency position, disposed of nearly 4 billion in non-core assets and increased operating Return on Equity to above 13%; and - we are able to declare a dividend of 60 cents per share, an increase of 33% against last year, so that shareholders can directly benefit from our efforts over these past two years. We will now be looking forward, to setting new priorities for the future with the confidence of having rapidly putting our house in order and reshaped our business in a simple and disciplined way. Generali is in a stronger position than it has been for many years and we will remain focused on delivering on the financial and operational performance that has brought us to where we are today. Delivery against financial priorities (1) A key promise in the 2013 strategy was to deliver a sustainable improvement in our profitability. At the heart of this was our target operating return on equity which we aimed to be in excess of 13%. We have delivered this in 2014, driven by the combination of our Life and P&C businesses each having an outstanding year. Our net profit is also heading in the right direction with a 22% increase against last year, adjusting for the operations we have disposed of. Over the past two years we have carried out a substantial non-core asset disposal programme selling a number of assets that would have previously made contributions to our bottom line and we've also acquired minority interests across many parts of our group. This has simplified our group and so what you see in these results is the performance of our core insurance business. We have made good progress but there is still plenty we can - and will do - to further improve on our results. Delivery against financial priorities (2) Another key part of our promise to shareholders was improving the financial strength of our group, bringing it in line with our international peers. We fixed the Solvency I position of the group during 2014, reflecting the completion of the disposal program, retained earnings, and markets. At year end, the ratio stood at 164 % pro-forma, above our 160% target. But, while

2 it is good to report an early completion of the Solvency I target and accomplishments that lay behind it, we are acutely aware that the world is moving on and Solvency II will be the norm from 1 January In this respect we still have work to do, and a number of uncertainties remain. We are applying all efforts in developing and optimising our Solvency II model, and bringing our work on the capital consumed by both asset and liability risks in line with peers. The same energy and focus we have put into reaching our Solvency I target is being deployed in this work. Having brought Generali out from under the shadow of our capital situation in 2012, I have full confidence in our ability to deliver on this task and put us in the place we need to be. We are not there yet, but we are fully committed to meeting our deadline and closing this gap. Operating performance highlights (Italy and Germany) Turning to our operational performance, as I said, our core businesses have overall performed strongly. Starting first with Italy, which has had an outstanding performance. The team there has nearly tripled the life net inflows, taken more than 3 points off the combined ratio and delivered impressive increases in operating profit. When one considers the extent of the restructuring being undertaken in that business it is a very good achievement. It has been a huge undertaking, which the team has executed with excellence. This performance shows the quality of our people and franchise in a key market. In Germany we've also seen outperformance in P&C, with a 25% increase in operating profit. In the Life business, where the market challenges are well known, they have produced a very credible result with an increase of just over 10% in operating profit. Despite our leadership positions in unit linked and protection, we must obviously remain vigilant to the difficulties of an extended period of low interest rates not only on our traditional savings business but also on our clients and potential clients. Part of our response will be to accelerate some of the programmes you saw outlined in November. To do this we have appointed Giovanni Liverani as a new country CEO. Giovanni has extensive international experience in our group which will be an invaluable asset in reviewing our strategy to tackle the challenges ahead. Operating performance highlights (France and CEE) In France, the additional reserving actions we have been undertaking were completed at year end. The first signs of the turnaround in the underlying business are beginning to show in both Life, and P&C. Having finished our portfolio pruning activities we will begin to see the results of this coming through this year. Since the arrival of the new CEO, at the end of 2013, our business in France has taken great strides in refocusing on its client offering and service. With its clear client proposition and restructured portfolios we look forward in 2015 to building momentum on the Life side, and to seeing a marked improvement in P&C margins. The progress of our business in central and eastern Europe is an important symbol of the journey the group has taken over the past two years. The previous joint venture structure was once seen as a risk to our solvency position and mark of complexity of our group. Especially in light of the fact we had no management control of the activities there. We now have discipline and simplicity and with complete ownership the ability to invest and fully benefit from our market leading position and technical capabilities. I am excited by our potential here, and moreover with a combined ratio of 87%, I believe there is significant technological knowledge to be shared across the group. Costs On this slide you can see the development of our costs over We continue to deliver on our gross costs savings target having achieved over 500 million as at year end. The cost efficiencies we are making are having an impact in reducing our overall costs particularly in our core mature markets. But, in our growth markets, for example Asia, and

3 our head office we have also focused on growth and building competencies and the overall increase in the group cost base is a reflection of this decision. We remain committed to our 750 million cost target to be reached by the end of 2015 but equally we will continue to assess where we can invest for profitable growth. Dividend With the positive developments in 2014 on our balance sheet and profitability, we continue to act to normalise the dividend of the group. The 33% increase in our dividend to 60 cents per share is a reflection of the confidence we have in both what we have achieved over the past two years and also what we believe we are capable of in the years' ahead. The equates to a pay-out ratio of 56% against net profit but excluding the main one-off items, which would put our net profit at just over 2 billion, the ratio would stand at 45%. Our long term vision is that we want to pay dividends that are sustainable, progressive, and in line with the momentum that we are working hard to achieve in the earnings capacity and cash generation of the group. Conclusion and looking forward Over the past two years Generali has been in an intensive period in which it largely looked in on itself to address the significant challenges it had in its solvency, profitability, governance and transparency. This was the right and necessary thing to do. We brought to this challenge three key concepts: discipline, simplicity and focus and in a relatively short timeframe transformed the financial and operational profile of our business. We are back on a solid footing and in better shape than we have ever been. In this transformation we also ingrained that discipline, simplicity and focus into our mindset and way of doing things. I can see the result of this on a daily basis as I visit our businesses across the world, it is a hunger to be a market leader in everything we do. To achieve this we are now going to turn outwards and apply that mindset to how we do business with our customers so they choose us and stay with us, how we win market share and create and enter new markets and how we design and deliver new products and services. To conclude, the three year turnaround plan we set out in January 2013 was to restore the profitability of the group and its capital position. Both of these have been done one year early. Financially, we are in a much better shape and the group is more focused and disciplined so it is with excitement and confidence that I look towards our future. Now, I turn it over to Alberto to take you through the financials in more detail.

4 ALBERTO MINALI, Group CFO Good morning, this is Alberto Minali, CFO of Generali. I am pleased to report to you this morning our full year 2014 results. Key Full Year 2014 financials at a glance Let me start with a brief overview, while noting that, as before, prior year s figures have been restated throughout the whole presentation to reflect the new geographical perimeter of the Group. The total operating result of the period is up 10.8 percent year on year to 4.5 billion euro thanks to the positive performances of both Life and P&C segments. The net result of the period is down 12.8 percent 1.7 billion euro, despite the increased operating result, due to the discontinued operations line. Specifically, last year we had a 485 million euro positive contribution from the disposal of Mexican and US businesses, whereas this year, we have a loss primarily driven by BSI. Excluding the discontinued operations, profit after tax is up 21.6%, and Net Operating EPS is up 16 percent. The Operating RoE has improved strongly by 150 basis points, from 11.7 percent to 13.2 percent, above the target level of 13 percent. Shareholders equity is up 17.3 percent from year end 2013, to 23.2 billion euro. The Solvency I ratio consequently improved by 15 percentage points from the end of 2013, reaching 156 percent at the end of December. This ratio includes the negative impact deriving from the minority buyout in CEE, as well as the positive contribution deriving from the subordinated bond issued in April. On the contrary, it does NOT include the benefit from BSI, which we should hopefully close in the next weeks, and which should add a further 8 percentage points, bringing the pro-forma ratio to 164 percent. Operating result by segment Looking at the segments in more detail: Both Life and P&C are showing strong performances. The Life operating result is up 15.2 percent to almost 3 billion euro. P&C is up 13.1 percent to 1.8 billion euro. As you can see, after the reallocation of BSI to discontinued operations, Financial Services and Holding Expenses have been merged, creating a new segment called Holding & Other Businesses. This segment has declined from a positive 128 million euro at the end of 2013, to minus 5 million euro, due mainly to some reclassifications which I will return to in more detail later. New segment reporting As well as the merger of the old Financial segment into holding and other, there have been also some other minor changes in the way we report our segments. In particular, we have moved some non-insurance entities out of the Life and P&C segment, and we have amended the way we treat intra-group investment income. Slide 15 in the package explains the details of this, which hopefully makes it clear. From operating result to net profit Let s then see the journey from operating result to the bottom line: Non-operating investment income decreased by 222 million euro to 203 million negative, mainly due to higher impairments. Here we have the specific issue of our 38% stake in Ingosstrakh. In the last quarter of the year, due to the negative trend of the rouble, we impaired this stake by further 59 million, bringing the overall write down of the year to 249 million euro. This takes the remaining value of this asset at around 230 million euro in our books. In addition, the liability management transaction, with the buyback of three hybrid bonds, led to a realised loss of 79 million euro as previously announced. Non-operating holding expenses increased slightly, by 17 million euro, to 819 million euro. The main item of this category, interest expenses, posted a 6 million decrease, showing the first signs of an improvement linked to the deleverage exercise we are executing. I remind you that, in November we have reimbursed a further 750 million euro of senior debt. This

5 will, together with the liability management exercise, further reduce interest expenses prospectively. Offsetting this, net other non-operating expenses decreased from 795 million euro last year to 441 million euro, still including 182 million euro of restructuring costs. The tax rate is at 36.9 percent, 3.4 percentage points up from last year and above the upper end of the normal 33 to 36 percentage range we expect, driven by some timing differences, and, for example, the limited tax deductibility of the impairment of Ingo. The result from discontinued operations is 69 million euro negative, compared to a positive effect of 485 million euro last year, as I explained earlier. In fact, in the fourth quarter we have a number of effects in this line. One of these is that we have reserved for our best estimate of the US fine related to BSI. However, as of today, we have booked an estimate only, as we have still not reached a final agreement with the US Department of Justice. At this stage, it is inappropriate to comment further, but we will update you with details of the final settlement in due course, once this agreement has been definitively reached. This swing in the discontinued operations line drives an overall net result of 1.7 billion euro, down 12.8 percent year on year, but I remind you again that, based on our current group perimeter, profit after tax from continuing operations increased strongly by 21.6 percent Group Free Cash Flow Let me now turn to one of my and your favourite topics, that is cash. The Gross Free Surplus of 2.8 billion euro is in line with 2013 results and confirms the sound capability of our Group in generating free resources. In particular, we have generated this despite the significant increase in new business volumes. The related net free cash flow generation is also stable with respect to 2013 levels, at 1.2 billion euro. Please note that the remitted cash is calculated on the bases of 2014 dividends that our subsidiaries are going to pay to the parent company in the next few months. Italy is once again the main Group contributor both in terms of Free Surplus and Dividends. This is directly related to the weight of the Italian business with respect to the other main countries, and we expect Italy to remain a strong reliable source of dividends also in the future. Elsewhere, the Group has a good degree of flexibility in increasing dividends from the subsidiaries if needed. As previously indicated, France will not pay any dividend this year, and we expected it to start again next year. The contribution from CEE is also expected to increase now that Generali has full control of the business operations in that area. All of this gives me the confidence to say that we are on track to reach our ambition of 1.5 billion Euro net free cash flow before dividend in 2015 Shareholders equity Let us now turn to look at the balance sheet. Shareholders equity increased by 17.3 percent, reaching 23.2 billion euro. The mark to market of available for sale assets was a strong positive factor, 4 billion euro, mainly benefitting from the good performance of bond investments. The net result of the period was 1.7 billion euro, as you have already seen. On the negative side, we have the dividend paid in respect of 2013, at 0.7 billion euro, and other items at minus 1.5 billion euro. Of these, 648 million relate to the negative impact of the acquisition of the remaining minorities in CEE that we carried out in January 2015, but which we have already taken into account in the balance sheet and solvency ratios. The rest of the item other comprises the effect of the squeeze-out of the minorities in Germany, and a mark to market effect on pension liabilities driven by lower interest rates. Solvency I Following the good development in shareholders equity, our Solvency I ratio increased by 15 percentage points from the end of 2013, to 156 percent. This result has been achieved notwithstanding an 8 percentage points negative impact from M&A activities, mainly deriving from the buyback of the remaining 24 percent minority interest in our CEE operations. In addition, 5 negative percentage points come from the underlying growth of our required margin. Finally, our 2014 dividend to be paid in May 2015 implies a further 6 percentage points negative impact. On the positive side, 10 percentage points contribution derives from the net result, while the

6 previously mentioned appreciation of investments accounts for 18 percentage points. An additional 6 percentage points increase comes mainly from the subordinated debt issued at the end of April. In the coming weeks I remind you that we should finalise the sale of BSI, expected to close in the first half of Subject to final adjustments, this should add approximately 8 percentage points to our solvency 1 ratio, bringing the overall pro-forma level to 164 percent at the end of Leverage Let s now focus on our debt leverage. The Leverage Ratio is at 38.5 percent net of the double counting of the Euro 500 m senior bond maturing this year. Including the double accounting, the Leverage ratio would be at 39.5 percent. The interest cover improved to 5.3 times which is mainly linked to the improvement of Group profitability, and to the reduction in interest expenses thanks to the refinancing activity at lower rates and the net reduction of the stock of debt. We expect this ratio to further improve during the course of Let me finally remind you of our successful Liability Management transaction completed in November, which allowed us to refinance part of our hybrid bonds callable in 2016 and 2017 at an attractive rate thanks to the positive market momentum. At the end of 2014 the average cost of our financial debt was 5.62 percent, around 30 basis points better than the year before. Group embedded value rollforward Now, moving to more economic views of the balance sheet. The overall Group embedded value has declined by from 28.8 billion euro, to 26.4 billion euro at the end of This is of course primarily a function of the much lower interest rate environment at the year end. In particular, we had negative economic variances of 4 billion euro. 4.2 billion is explained by the decline in interest rates, while a positive impact from lower spreads of 1.3 billion was mostly offset by higher volatilities, which cost 1.1 billion. Overall, these net negative economic variances more than offset the 2.9 billion contribution of normalized earnings of the group. Dividends paid of 0.7 billion and the effect of the change in perimeter from minority buyouts of 0.5 billion explain the remainder of the journey to the year end closing figure of 26.4 billion. Economic solvency The negative financial market impacts are also evident in our economic solvency ratio. Proforma for the sale of BSI and net of dividend, our economic capital requirements are covered 1.6 times at the year end. It is quite a notable move down from 1.8 times coverage last year, although the level at which we land is not an uncomfortable one for us, and is in the same region as the Solvency I coverage. Let me explain the change in a little more detail. The change in risk capital is the major driver, generating 24 percentage points of the decrease. Germany in particular, is the largest contributor to this, where as you know, the whole industry has a situation of extremely low interest rates relative to the guarantees of the legacy book. Here, the decreased ability of policyholder buffers to absorb another extreme market stress, on top of the currently very low interest rates already projected, has generated an increased capital requirement. Elsewhere, 5 percentage points decline came from the change in perimeter, and the minority acquisitions we have executed. A further four percentage points come from the proposed dividend, whereas other contributors to available capital are stable. In conclusion, the year-end number is lower due to the very low level of interest rates. It remains within a comfortable range, although I would add that we are considering taking optimisation or other measures on the balance sheet to increase the position in the coming months, if they make economic sense to do. Let me focus now on our business segments, starting with Life. Life key financial indicators Overall life premiums increased by 11.2 percent to 49.8 billion euro. The positive trend is

7 driven by a confirmed strong growth of unit linked business, up 43 percent, in particular in Italy where the production increased from 569 million euro to 2.7 billion, but also in the EMEA region. Life net inflows consequently continued their strongly positive trend, growing 49.7 percent year on year and reaching 12.7 billion euro. The life operating result is up 15.2 percent. New business value is up 33.7 percent at 1.2 billion euro, driven both by APE and margin expansion. Life Operating result by driver Let me dive into the single drivers of the life operating result, and I would say that, compared to previous quarters, trends have been quite similar on the expense and technical margin side, while there has been a progression on the investment result. Starting with the right hand side of the chart: Expenses were lower by 1.1 percent, and as in previous quarters, this includes lower acquisition costs especially in Germany, which in turn was due to the lower single premium production we have previously indicated. The overall expense ratio on premiums fell to 9.7 percent, from 10.8 percent last year. This reduction in expenses is partially shared with policyholders, particularly in Germany, and this sharing element is booked in the Technical Margin. This, together with lower loadings in absolute terms, explains the decrease of 2.9 percent. Lastly, the Investment Result went up 29.2 percent to 2.2 billion. Our gross investment income benefited from both higher current income, and higher realised gains. I would add that part of these profits have been used to increase our policyholders reserves, such as the strengthening of the PPE in France by 150 million euro and the ZZR in Germany by 133 million euro, net of policyholders participation. Life inflows and technical reserves Life net inflows further accelerated, increasing by over 4 billion euro compared to the same period of last year, to 12.7 billion euro. 53 percent of net inflows relate to unit linked contracts, a significant increase from 31 percent last year. Our focus remains on increasing sales of more capital efficient products. Looking on a country basis: In Italy, we have a particularly strong increase of net inflows at 5.7 billion euro, almost three times what we achieved in This was driven by a positive trend in all distribution channels, helped by the roll-out of our hybrid products, with a sharp increase of unit linked sales In France, after years of outflows, we have 615 million euro positive net inflows in 2014, with an improving trend of Saving & Pension and Unit Linked, in particular in the second half of the year. I remind you that in the first quarter we were still affected by significant surrenders in the private wealth management segment. The decrease in net inflows in Germany is again linked to the planned reduction of single premium savings business, as I have described in previous quarters. Lastly, the robust increase in EMEA is driven by the strong performance of wealth protection products in Europe, and notably through our platform in Ireland These strong net inflows contributed to an overall 6.9 percent increase of life technical reserves during 2014, to 347 billion. It is worth highlighting the particular positive development of Unit Linked reserves, up 14.5 percent to 67.5 billion euro. Life investment performance Life general account investments reached 321 billion euro, up 14.6 percent, also driven by positive mark to market performance of available for sale investments (mainly bonds) Total Life current returns are down 20 basis points to 3.6 percent. Fixed income current returns in particular declined by 0.3 percentage points to 3.6 percent, mainly due to asset base appreciation, i.e. the fall in market yields. At the same time current income improved by 337 million euro in absolute terms. During the year, we invested pre-existing cash, net inflows, bond redemptions and coupons, at an average yield of 3.1 percent in the life segment (compared to 3.6 percent in 2013), of course reflecting the low interest rate environment.

8 Life new business analysis Turning to new business, APE is up 14.2 percent, like for like, to 5.2 billion euro, driven by a strong performance of unit linked production, up 41.8 percent. Looking at our main countries: We can see a good development in Italy, which is up 35.1 percent, in all business lines. Particularly strong is the increase in Unit Linked business where APEs reached more than 5 times the level of last year. The weight of unit linked on total APE increased from 3 percent in 2013, to 11.5 percent in France is up 9 percent, confirming a recovery started in the second quarter of the year, after the earlier decision to reduce the exposure to the low margin wealth management segment. Germany is down 12.6 percent driven by the planned reduction of traditional savings single premium production, as previously explained. Unit Linked business, however, shows a 17.7 percent APE increase, bringing its weight on APE from 18.7 percent to 25.2 percent. The new business margin improved to 24 percent, up 3.5 percentage points on a like for like basis, generating a 34 percent increase in new business value, and despite the worsening financial market inputs, and in particular, 32 basis points lower reference rates on average. Improved profitability was driven by the more favorable product mix, with the increased weight of Unit Linked business up to 21.7 percent from 16.9 percent year on year, and the better features embedded in 2014 products. The average guarantee offered in the Euro Area went down from 1.17 percent to 0.91 percent year on year. Now let s turn to look at P&C P&C key financial Indicators Gross written premiums are overall stable, on a like for like basis, at 20.6 billion euro. This shows an improvement with respect to previous quarters, with the fourth quarter increasing by 2.5 percent. Looking at business lines: Primary Motor is improving with 0.8 percent growth to 8.1 billion euro and a 4.9 percent acceleration in the last quarter. Primary non motor premiums are stable, at 11.9 billion euro. The combined ratio improved by 1.9 percentage points to 93.8 percent. which I will explain further in a moment. The operating result improved strongly by 13.1 percent. P&C Operating result by driver Looking at the components of this operating profit improvement, we can see a strong technical margin at almost 1.1 billion euro, up 36.2 percent, driven by the higher underwriting margins I referred to. The investment result is overall stable, with lower investment returns compensated by a higher balance of invested assets, while other items experienced a 71 million decrease. In this line, we had a small one-off positive in Italy last year for 14 million euro, and this year, we have a negative from the same country approximately 20 million euro related to the accelerated amortisation of IT systems, which have become redundant as a result of the integration activity. In addition, we have an impact of re-allocating some pension related items between the Life and P&C segments. P&C gross written premiums trends Let s look now at gross written premium developments within our core countries. Italy is down 2.9 percent, at 6.1 billion euro, driven by the highly competitive environment of motor. Primary Motor still decreased by 4.9 percent. In primary Non Motor, there is a positive trend of personal lines that are up 2.1 percent, while commercial lines are flat. On the negative side, Accident & Health is down 6.7 percent as a consequence of pruning activities on some group contracts and for 1.7 percentage points due to an accounting oneoff effect. France is down 6.5 percent to 2.5 billion euro due to the competitive market environment and the continuation of strict underwriting guidelines and pruning activities. Primary motor continued its negative trend with a 7.2 percentage decrease driven by a declining number of contracts and an ongoing pruning of unprofitable fleet and garage related contracts. However, as a first sign of improvement, we see retail new business contracts increasing by 8 percent and cancellations decreasing by 16 percent. Outside of motor, Personal and Commercial lines are down 4.3 percent and 7.4 percent respectively as a consequence of

9 actions aimed at restoring profitability in a competitive environment. We see continuing positive development in Germany, up 3.3 percent to 3.5 billion euro. In Motor lines, we are up 4.3 percent, thanks to continued positive price effects, and you can see how the intra-year negative impact of flexible renewal dates levelled off as expected. In non-motor, there are positive developments in Personal and Commercial lines which are up 4 percent and 5.0 percent respectively, while Accident & Health shows a 2.2 percent decrease. Combined ratio analysis Moving to the profitability analysis, the combined ratio improved by 1.9 percentage points year on year to 93.8 percent, driven by a reducing loss ratio, down 1.8 percentage points. The latter was driven by a current year loss ratio down 0.3 percentage points, and a 1.1 percentage point lower Nat Cat burden. Prior years development, at 3.8 percentage points, was 40 basis points higher than last year, and within in our normal 3 to 4 percentage points range. The expense ratio remained stable at 27.1 percent. Combined ratio by country Let s have a look at the combined ratio in our main countries. In Italy our combined ratio improved even further to an excellent 89.2 percent, down 3.2 percentage points, entirely driven by an improved loss ratio and despite higher weather related costs which drove nat cat losses higher by 1.2 percentage points. In France the combined ratio improved slightly to percent. This unsatisfactory level is linked to the still bad performance of fleets and garage related motor lines, where as I have mentioned, pruning activity is ongoing and 2014 should have represented the peak of this negative performance and I expect already from 2015 to see tangible profitability improvements. We have an improved combined ratio in Germany, at 92.6 percent, 3.1 percentage points lower year on year, benefiting from a lower nat cat burden: Nat cat losses were 1.1 percent against 4.1 percent last year, when as you remember, we had significant flood events. In CEE our combined ratio reached an excellent 87.7 percent, confirming once again the quality of our franchise. In our smaller operations, I would highlight Asia, where we had some abnormal losses in the previous year, and where the combined ratio has consequently improved this year. In LatAm, we have a deterioration to a 113 percent combined ratio. This is in particular explained by Brazil, where underwriting results have been highly unsatisfactory this year. Here, we have taken strong action, including the replacement of management, exiting unprofitable business lines, internalising claims management, and enforcing new underwriting criteria. Taking the overall picture of the group s underwriting performance, however, I think we can be satisfied with a combined ratio which has reached new lows. P&C investment performance Overall P&C investments reached 39 billion euro, up 7.3 percent from the end of 2013, also thanks to positive market movement of available for sale assets. In terms of current profitability, total P&C current returns decreased from 3.9 to 3.5 percent. Fixed income current returns marginally decreased to 3.4 percent, while real estate and equity ones are stable respectively at 5.9 and 3.6 percent. Overall, we reinvested new money at a rate of 2.5% in 2014, down from 3.2% last year, and a reflection of course of the underlying interest rate environment. Focus on Holding & other business segment Let me finally turn to our new Holding & other businesses segment, whose overall contribution to the group operating result decreased from a positive 128 million Euro, to a negative 5 million Euro. Let s look at the main component of this result, starting from the positive contribution of Financial businesses that posted a 8.9 percentage improvement. The main driver of this good result has been the performance of Banca Generali, with an 11.7 percentage increase. As you can see, Banca Generali is the majority of the Financial sub-segment, with the other

10 elements being mainly our own asset management operations, alongside other miscellaneous financial operations. Operating holding expenses increased from 349 million euro to 418 million euro partially due to the strengthening of our corporate centre functions as we have previously mentioned. Other businesses had a reduced contribution, down 94 million euro, due mainly to a reclassification of a property development from Non-operating to Operating. We have not retrospectively re-stated for this, and hence the full year loss from this development of 60 million euro has been booked entirely in the fourth quarter. Final remarks Let me conclude: Improved operating profitability of the group means we have surpassed our 13% Operating RoE target for the first time, and ahead of schedule. Both of our core segments are strongly contributing, with double-digit percent operating profit growth. Our Solvency I position is at the level we targeted, and we will be continuing to work very hard in the coming months on the forthcoming Solvency II implementation. Lastly, as Mario has said, the results achieved allow us to propose an again improved dividend, up by one third to 60 cents per share. Thank you for your attention. IL GRUPPO GENERALI Il Gruppo Generali è uno tra i maggiori assicuratori globali con una raccolta premi complessiva superiore a 70 miliardi nel Con collaboratori nel mondo al servizio di 65 milioni di clienti in oltre 60 Paesi, il Gruppo occupa una posizione di leadership nei Paesi dell Europa Occidentale ed una presenza sempre più significativa nei mercati dell Europa Centro-orientale ed in quelli asiatici.