MOTOR UNDER PRESSURE IN EUROPE, SAYS GENERALI; H1 NET PROFIT DECLINES

The non-life motor sector in Europe continues to be subject to strong competitive pressure, Italian insurer Generali said yesterday, as it released its first-half results. The insurer reported a “significant fall in new car registrations” leading to “a slight decrease in the overall premium income of the non-life segment in Italy and Germany”. The combined ratio improved slightly to 94.6%, from 95.0% in H1 2007. Gross non-life premiums rose slightly to €11.79bn ($18.5bn) from €11.22bn. The operating result fell slightly to €196.0m from €215.0m in the same period last year. Gross life premiums rose to €25.0bn from €23.2bn. The net result of the period attributable to the group fell 17.9% to €1.46bn, mainly as a result of falls in stockmarket valuations. The operating result declined 12.9% year on year to €2.54bn. Operating income from investments fell by nearly €7bn to €2.24bn. Net operating income from financial instruments at fair value fell to minus €3.74bn from plus €3.27bn, most of which is risk borne by Generali policyholders. The company has not set a profit goal for 2008, with chairman Antoine Bernheim noting that the current financial environment had resulted in an “ever-more uncertain outlook for the rest of the year”. It is targeting a gain of €3.8bn in 2009. Investment bank Keefe, Bruyette & Woods noted that “new business continued to be written at a profit and the margin decline by three percentage points at the group level was largely driven by adverse mix effects in France”. Meanwhile , Cesare Geronzi, chairman of Generali’s largest shareholder Mediobanca, raised speculation of a future shake-up at Generali when he told Italian daily Il Sole 24 Ore that two chief executives at Generali was at least one too many, and that the chairman at Generali — 89-year-old Frenchman Antoine Bernheim — should have more powers. Mr Geronzi denied that he had any “cravings” to replace or succeed Mr Bernheim.