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UPDATE 1-Generali operating profit falls less than expected in first half
July 29, 2016 / 7:26 AM / a year ago

UPDATE 1-Generali operating profit falls less than expected in first half

* H1 EBIT 2.49 billion euros vs f‘cast 2.33 billion

* Premiums down 2 pct at 37 billion euros

* Shares up more than 4 pct (Adds comments from conference call)

MILAN, July 29 (Reuters) - Italy’s top insurer Assicurazioni Generali beat market expectations on Friday with a 10.5 percent drop in first-half operating profit, as it wrestled with ultra-low interest rates and tough stock markets.

Generali, Europe’s No.3 insurer, said in a statement first-half earnings before interest and tax (EBIT) came in at 2.49 billion euros ($2.8 billion), above a Thomson Reuters analyst forecast of 2.33 billion.

“Despite the difficult environment and highly volatile financial markets, the group expects to improve shareholders’ return in 2016 as indicated in the business plan,” it said.

Chief Executive Philippe Donnet told journalists on a conference call that group targets had not changed, but added the insurer would fine tune its strategy to deal with a difficult environment.

In particular, Donnet said Generali would rebalance its portfolio, concentrating on businesses that absorb less capital and liquidity.

Shares in Generali rose more than 4 percent by 0713 GMT, outperforming a 0.8 percent rise in Italy’s blue-chip stock index.

Premiums in the period totalled 37 billion euros, falling 2 percent due to weakness in the life segment.

The economic solvency ratio, a closely watched measure of financial strength calculated using internal models based on Solvency II principles, stood at 188 percent at the end of June, unchanged from three months earlier and down from 202 percent at the end of 2015. ($1 = 0.9029 euros) (Reporting by Valentina Za and Gianluca Semeraro; Editing by David Holmes)

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