November 7, 2019 / 7:41 AM / 10 days ago

UPDATE 1-Generali profits rise, capital reserves hit by low interest rates in Q3

(Adds details from statement, context)

MILAN, Nov 7 (Reuters) - Italy’s biggest insurer Assicurazioni Generali reported a rise in nine-months profit on Thursday that was broadly in line with market estimates, though capital ratios fell due to regulatory changes and low interest rates.

Generali’s solvency ratio, a key measure of financial strength, stood at 204%, down from 217% at the end of 2018, due to expected regulatory changes and lower interest rates in the third quarter, the company said.

The fall in interest rates was not fully compensated by a narrowing of government bond spreads, the company said in a statement.

“Within the context of persistent low interest rates, the Group’s capital position remains solid,” Chief Financial Officer Cristiano Borean said in the statement.

The solvency ratio rose to 209% as of Oct. 25 and could be higher today thanks to the recovery of stocks markets and an uptick in interest rates in recent weeks, he told a press briefing.

Operating profit grew 9.1% to 3.9 billion euros ($4.31 billion), in line with market consensus provided by the company of 3.88 billion euros.

Net profit rose 16.6% to 2.163 billion euros, on a one-off gains of 475 million euros from asset sales and a 188 million euros charge from a buyback of subordinate notes. Without those items, net profit was 1.872 million (+6.2%).

Gross written premiums grew 3.2% to 51.4 billion euros with a 24.4% rise in net inflows to the life segment to more than 10 billion euros and positive performances in all regions where Generali operates, especially Italy, France and Asia.

Property and casualty premiums rose 4.3% with a combined ratio, a measure of profitability and financial health of an insurance company, of 92.5%, in line with market expectations.

$1 = 0.9042 euros Reporting by Gianluca Semeraro; editing by James Mackenzie and Emelia Sithole-Matarise

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