MILAN (Reuters) -Italy's Generali (BIT:GASI) confirmed all its 2024 business plan targets on Thursday after first quarter profits rose on a strong non-life performance which more than offsetting weakness in the insurer's life business.
Generali reported net outflows of 190 million euros ($209 million) in its life business, compared to inflows of 3.7 billion euros in the same period last year, as attractive yields on Italian government bonds prompted customers to switch to BTP bonds, its finance head Cristiano Borean told a press briefing.
Borean said this was particularly true of affluent customers and high-net-worth individuals who bought insurance products in bank branches and approached them as an investment.
"We saw this trend already in the last quarter of 2022, and it continued in the first quarter of 2023, but the banking channel accounts for less than 10% of the group's total life reserves," Borean said.
Preliminary numbers for April and May showed "an improving trend in Italy", Generali General Manager Marco Sesana told an analyst call.
The Bank of Italy's latest Financial Stability Report last week said that redemptions in the life insurance sector amounted to 85% of premiums at the end of March, compared with 53% as of the end of December. For insurers relying on banks and financial advisers for distribution, redemptions were 119% of premiums.
Overall Generali's life segment proved resilient, with operating profit growing 1% year-on-year in the first quarter.
The group's adjusted net profit came in at 1.23 billion euros, up 49.7% year-on-year, while its operating profit, most closely watched by the market, grew 22.1% to 1.82 billion euros.
Generali said it has started reporting adjusted net profit to better reflect the underlying business dynamic.
Borean said Generali maintained a solid capital position with a solvency ratio of 227% at the end of March from 221% at the end of 2022. It rose to 228% as of May 19.
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