GENERALI SEES ITALIAN BUSINESS DECLINE

Italian insurer Generali has posted an operating gain of €2.41bn ($3.19bn) for the first half, up from €2.36bn in the same period last year. The non-operating segment booked a loss of €776m for the half, compared with a loss of €590m in H1 2012. There were net impairment losses of €300m, up from minus €163m in the same period last year. The result attributable to the group was up 28.4% year on year to €1.08bn. Gross written premiums (GWP) declined to €34.8bn, from €35.6bn. Non-life GWP were down to €11.72bn, from €12.42bn in H1 2012. The technical result in non-life was €508m for the half, up from €272m in H1 2012. Catastrophe losses amounted to €210m for the half, of which nearly 50% related to the flooding in central Europe in June. The total was still less than the €255m recorded in H1 2012. The combined ratio for the half was 94.7%, down from 97.1% in H1 2012. The strongest CR performance was in Italy, down 8.9pp year on year to 90.8%. Central and Eastern Europe's CR was 3.1pp higher at 90.6%, mainly because of a 5.4pp impact from catastrophic events, particularly the June floods. Rest of World CR was 106.2%, up 9.3pp, with a negative trend in the loss ratio and the expense ratio. Of the €909m H1 operating result in non-life, Italy contributed €358m, up from €120m. France (€131m), Germany (€138m) and Rest of Europe (€184m) were relatively flat. The Rest of World technical result declined to €11m, from €40m in H1 2012. In Italy, premium income for Generali suffered along with the rest of the Italian economy. The insurer referred to a "challenging macroeconomic scenario" that had caused written premiums in Generali's home market to decline by 5.6% year on year. Motor in particular was weak, with a 6.3% decline in premiums reflecting a 10.3% fall in new car registrations and a high level of competition. There was also a decline in Spain, where premiums were off 4.6%, and in all the other main European countries that Generali operates, with the exception of France and Germany. In France, non-life GWP were up 2.5% in the first half, with a 4.5% increase in non-motor, helped by rate increases. Motor was up by 2%. In Germany there was a 2.8% increase in non-life premium income, helped by a 5.3% rise in Motor. Commenting on the results, CEO Mario Greco said that “Generali is more focused and profitable than it was a year ago and we are well on track to achieve the targets we have set ourselves,