Generali to review operations in up to 15 markets
During its investor day presentation, the firm also said it aims to cut operating costs in mature markets by €200m during the 2016-2019 period.
Generali 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, the insurer said in a statement.
At the same time, it will exit from less profitable markets in order to increase operational efficiency, improve capital allocation and mitigate risks.
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“Thus, the rationalisation process already started with the disposal of the businesses in Guatemala and Lichtenstein will continue and is expected to generate at least €1bn of cash by 2018,” Generali said.
In Guatemala, Generali signed an agreement to sell its participation – equivalent to 51% of the share capital – in Aseguradora General S.A., a company that is mainly active in the property and casualty (P&C) segment, to its local partners.
In Liechtenstein, the Generali group signed an agreement through its subsidiary Generali Schweiz Holding AG for the sale of 100% of Fortuna Lebens-Versicherungs AG – a life insurance company in run-off since 2015 – to FWU AG, a Munich-based financial services business.
Generali did not specify which markets it is considering leaving next or whether it will divest life or P&C business. But Reuters coverage quoted broker Intermonte as saying that South American or Benelux countries could be among the candidates.
Generali CEO Philippe Donnet confirmed the group’s 2018 targets of cashflow generation in excess of €7bn, dividends greater than €5bn and an average operating return on equity of 13%.
“We have established greater coordination and discipline across business units, with local CEOs empowered to monitor the progress of our strategic levers through targeted KPIs,” Mr Donnet said. “Our goal is leadership in our chosen markets, not measured by size but by profitability.”
