Assicurazioni Generali SpA Q3 2024 Earnings Call-Q&A Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Baker - Goldman Sachs Group, Inc. - Analyst : So just on the P&C attritional. So benign frequency sort of low bodily injury claims in Q3 and you caution us from projecting linearly going forward. Are you just able to give us a bit more color on sort of breaking that out in terms of how much of the attrition you would have considered more sort of one-off or a quarterly benefit in 3Q? And then secondly, on the Life CSM, can you just help me unpack the variances a little bit? So the expected return in Q3 actually looked like it went up a little bit, and that was despite the lower rates. So curious what's going on there. And then I think you mentioned the EUR100 million of operating variances that was primarily lapses. And then just directionally, what was the impact from the economic variances? That would be really helpful.

Question: David Barma - BofA Global Research - Analyst : Two small ones on Life, please. Firstly, on the investment results. So clearly, another good quarter. You suggest there's some nonrecurring items in here. Is the proportion the same as what you suggested in Q2, which I think was half of the annual growth? So if you can give a bit of color on this. And then on the new business margin, so 4.9% in 3Q. Is there still an impact in there from the French protection business that was booked in Q1 this year and from the various marketing actions taken in Italy? And maybe if you can quantify those things together. And then lastly, on P&C, if you can give us an update on pricing versus claims inflation in your main markets and where you're seeing some pretty strong renewals at the end of the year.

Question: Michael Huttner - Berenberg Capital Markets LLC - Analyst : I loved your sentence on the jaws of the crocodile. And I suppose my question is how long is the jaw, in other words, does it I know it's forward-looking, so I don't know, '26, '27, '28? I'll give you a background. I was at the launch of your Spanish competitor on Monday and they also mentioned, it was a crocodile, but they said it two years. So I'm hoping you can say thanks to your pricing actions still to come, maybe three years with it? My second question be on cash. I know it's very far too early, and you probably say again, leave that. But I know there's a lot of wall-off cash this year, but maybe you can give a feel given the very strong outlook in both your core businesses, how quickly that EUR700 million might be kind of cash back or earn back or whatever, in terms of getting the cash flow back up to current levels? And then my final question, and I'm sorry, it's three. In the solvency, your fantastic IR gave me a very detailed split of the solvency movements, which includes 1.5% operating variance negative. I'm sure it's something you've already mentioned, but I'd be curious.

Question: Will Hardcastle - UBS Group AG - Analyst : On those slides, thanks to the big picture comments on pricing globally. I guess which countries are you most confident of growing volumes in at the moment? And any way of where you still feel a little bit of a retrenching necessary? And just it certainly sounds like the nat cat budget is being focused on. I guess what do you think here has got a role in the budget setting over the last few years? Is it just a higher frequency of the severity of events versus the reinsurance shift in the last couple of years? And is there anything you can do on reinsurance? Or is it simply just raise the budget?

Question: James Shuck - Citigroup, Inc. - Analyst : I had a question on just the restructuring costs to begin with. You mentioned that in your comment. Restructuring costs have been a bit of a feature of Generali for many years, absorbing quite a high proportion of the net income. I think last year, you kind of came in around the EUR 300 million level. I'm just wondering kind of where we're going to settle this year and then the kind of outlook as we go into the next plan. So ideally, that should be fading away to zero, but I'm just keen to get your thoughts on that. So that's my first question. Secondly, I think Cristiano, you'd indicated in the past for the life insurance service results that the full year would see that some of the loss component experience variances and other income expenses would be negative low triple-digit millions, which it looks like it will end up being. My question is kind of on the outlook for that, please? Because just keen to understand if we're going to see an element of those recurring going forward because that would be a key consideration in earnings growth outlook. And then if I may, just please just ask about the trajectory for the investment income in P&C. So wherever we land at this year-end, will you be expecting growth in absolute terms in the investment income? Are you still seeing a positive difference between the running yield and the reinvestment yield?

Question: William Hawkins - Keefe, Bruyette & Woods, Inc. - Analyst : Lots of your questions have eaten mine up already. So I'm going to one, please. Just back on Michael Huttner's question about the solvency ratio. First of all, just a housekeeping, can you tell me the numerator and the denominator behind the 209 million, please? But more importantly, we're now third quarter, I think you're seeing the operating variances being an increase in the SCR having historically seen that as a tailwind to the solvency. Are we now into a structural pattern where because your business is growing and because of inflation and that kind of thing, your SCR from an operating point of view will be rising? Or should we still be assuming that, that is a tailing SCR from operating items in the future?

Question: Elena Perini - Intesa Sanpaolo SpA - Analyst : Actually, I have only one. It is about your outflows from the saving products still in the third quarter. So I know that you expect to be back to positive flows in Italy by the end of the year, but I would like to have a bit more color also on other countries and on the overall picture for the group.

Question: Andrea Lisi - Equita Group SpA - Analyst : The first one is on the contribution from investment, the one that you said that before, as regards the yield on the front book and on the back book, if you can provide the data also for the Life business. The second question is still on Life. Considering also what you said on the new business margin that should be expected slightly down in the fourth quarter relative to the third one. Should we expect the trend in terms of growth year-on-year of the new business value to continue to accelerate as we have seen starting from the start of the year? And yes, as regards, the last question is on P&C on the combined ratio and impact of nat cat. Maybe I've not understood well, but just to have confirmation that the impact of additional nat cat you have seen so far in the fourth quarter is further EUR100 million. Just your confirmation on that.

Question: Steven Haywood - HSBC Holdings PLC - Analyst : Three questions, mostly clarifications here. On the nat cat side of things, can you tell me about the reinstatement premiums that you've had, if you can give a nominal amount and whether they were paid in the third quarter or fourth quarter, whether they come in the nat cat budget or coming in attritional, please? Secondly, you mentioned about some impairments on real estate investments. Could you give some indication of the geography and the potential percentage sort of amounts that you're seeing? And then thirdly, clarification on the Life SM roll forward in the nine months. What was the economic variances and operating variances? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: David Barma - BofA Global Research - Analyst : Just a few small things, please. On taxes first. You gave an amount for France. What is that based on? I would have expected a much higher taxable base for your French business. And for Italy, should we expect a thing following the tax and deferred tax asset package that was presented? Then, secondly, on motor, apologies if I missed that, but what was the undiscounted combined ratio for motor in the nine months? And then lastly, on asset management, revenues were pretty strong in the quarter, but I wanted to ask about the difference between Conning and the rest of Generali. On average, you generate about 20 bps revenue margin. Is there a big difference between the 2 units?

Question: Michael Huttner - Berenberg Capital Markets LLC - Analyst : Very quickly, it's on the expense ratio. And I was -- it was lovely to see 9 months '23, 29.4%; 9 months '24, 28.5%. Can you talk a little bit about this and how much more they may be to come? Sorry, I always want more.

Question: Michael Huttner - Berenberg Capital Markets LLC - Analyst : Fantastic. That's very clear. I did have one last question, if I may, and it's a positive one. Last year, I think this time or year before, you try to orient us towards the nine-month results. And this, it feels more like you're happy to orient people to Q3 as a stand-alone. My feeling is this is because the quarterly is set to kind of exaggerate a little bit rocket. Is that the right impression to get?

Question: Michael Huttner - Berenberg Capital Markets LLC - Analyst : Yes. No, I'm just saying you're focusing on quarterly. So it means that the quarterly trends are set to accelerate. Is that the right read? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Farquhar Murray - Autonomous Research US LP - Analyst : Just one for me. Actually, was just following up on Michael's question there on the loss ratio improvement. I mean I can understand that obviously, 0.3%, you might refer to as economic is probably the only component that's within your control, but just to double check. Obviously, Liberty is probably going to persist. I presume the inflationary component in Argentina persists if inflation remains low but presumably the economic component you're identifying is you continue your efforts there. So I think in with all of the 0.9% actually persists going forward or if I misunderstood something?