Generali to exit less profitable markets

In an update on its strategic plan, Generali has said that it will focus on markets where it is technically strong, efficient and profitable, and exit from less profitable markets. In order to continue to be competitive, it planned to “accelerate the execution of the strategy” through a number of strategic initiatives aimed at improving the operating performance and creating long-term value.

On the issue of improving the operating performance, Generali said it would be “optimising the geographical presence.” The Group said it intends to maintain “a global and diversified geographical presence by focusing where it is technically strong, efficient and profitable or where it can create those conditions in the medium-to-long-term period. At the same time, it will exit from less profitable markets in order to increase operational efficiency, improve capital allocation and mitigate risks.”

It said the rationalisation process already started with the disposal of the businesses in Guatemala and Lichtenstein would continue and is expected to generate at least Euro1bn of cash by 2018. Generali also announced a restructuring, integration and simplification process which will start in mature markets to generate a net reduction in costs of Euro200m, while making investment to grow the business in a disciplined manner in growth markets.