Generali sets out fresh plans for asset management expansion

Added 11th May 2017

Generali unveiled a fresh push into asset management and said it will bolster its fee-based business, after reporting a 9% fall in first-quarter profits on Thursday.

Generali sets out fresh plans for asset management expansion

Operating profits rose 4% to €1.2bn (£1.08bn, $1.3bn) as growth in life insurance was offset by a weaker result from property & casualty insurance, which suffered from €55bn of natural catastrophe claims.

Italy's biggest insurer said it aims to increase annual profits from €84m last year to €300m by the end of 2020 and expand assets under management to €500bn.

Generali said it hopes to achieve this by investing in its own business, which currently manages €450bn and revealed it will spend €35m on recruiting specialist staff and acquiring other asset managers.

Tim Ryan, group chief investment officer, said: “With our current AuM of nearly €450bn in Europe, we have a unique opportunity to internalise the management of a greater part of our existing assets and optimise our operations to lower costs.”

Generali, controlled by Italian investment bank Mediobanca, owns 51% of listed private banking and wealth management firm Banca Generali but does not intend to include it in its asset management plans.

Generali also released its first quarter results, which show that the insurer increased its unit-linked revenue by €30m and admitted that 86% of the group's €78bn unit-linked asset business was outsourced.

Generali first unveiled a standalone asset management venture last year, when the Generali Investments unit announced plans to set up an office in London to support expansion plans for its third-party business with institutional clients and private wealth managers. 

The move comes as a surprise as fees are increasingly under pressure across the board as clients jump ship low cost passive managers.

Generali cuts commission

Last week, it emerged that Dublin-based Generali PanEurope plans to cut the upfront commission by a third on its Vision regular savings plans that have terms of less than 10-years as such products were unprofitable.

The moves raised eyebrows as one IFA told International Adviser about the proposed commission change said it appeared that Generali was “incentivising the sale of longer term plans over shorter ones”.

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