MILAN (Reuters) -Italy's top insurer Assicurazioni Generali (BIT:GASI) will launch a 500 million euro ($540 million) share buyback plan this year, it said on Tuesday, confirming its focus on returns to investors.
The group is on track to meet all the key financial targets of its strategic three-year plan ending in 2024, it said in a statement.
Under the plan, Generali aims for average annual earnings per share (EPS) growth of 6-8% and to pay up to 5.6 billion euros in dividends.
Last November, CEO Philippe Donnet said that the company had 500 million euros left of the 3 billion euros earmarked for M&A deals and that the sum could be returned to investors if not used for acquisitions.
Donnet faced down a shareholder rebellion in 2022 to win another term as CEO which expires next year.
Generali last year agreed to buy the Spanish unit of U.S. insurer Liberty Mutual for 2.3 billion euros, strengthening its property and casualty segment.
It also struck a deal, structured as an exchange of assets without a cash consideration, to acquire Connecticut-based asset manager Conning Holdings, fulfilling Donnet's ambition to expand into the asset management sector in the United States.
The company expects the acquisition of Liberty Seguros to contribute more than 250 million euros a year to its pre-tax profit by 2029, and annual synergies of between 70 million euros and 80 million euros within five years of the Conning deal.
According to analysts at Banca Akros, the EPS accretion from recent acquisitions pushes "the consensus expectations moderately upward," and the share buyback flags "the focus of the group on shareholders' remuneration and its confidence in the cash and capital positions."
Generali expects its undiscounted combined ratio, which is under 100% when claims and any related expenses borne by an insurer lag the premiums it earns, will stay below 96% this year.
In 2022 Generali bought back 500 million euros worth of its shares under its first buyback programme in 15 years, using liquidity accumulated between 2019 and 2021 which it had not spent on M&A deals.
The company will hold an 'Investor Day' on Tuesday to provide an overview of its business and recent acquisitions.
($1 = 0.9250 euros)