The disposal is part of a plan announced in November by Europe’s third-biggest insurer to withdraw from less profitable markets where it lacks scale, and to focus on core countries.
The moves form part of a wider strategy aimed at “optimizing Generali’s geographical presence, increase operational efficiency and improve capital allocation” with a view to raising at least €1bn from disposals, the company explained.
“With this transaction, we reaffirm our commitment to the rebalancing of Generali Group’s geographical presence across the world,” said Frédéric de Courtois, Generali’s group chief executive for the global business lines.
“We are well on track in executing our strategy and we are confident to generate at least €1bn of cash”.
As part of the transaction, Generali will cease to provide any reinsurance support to Generali Nederland’s insurance subsidiaries, resulting in the withdrawal by the Dutch life insurance company of the reinsured portfolio with Assicurazioni Generali.
The deal in numbers
Generali Nederland generated premiums of €379m in 2016, according to ASR.
The acquisition would add €30m to ASR’s annual profit after the deal closes in the first quarter of 2018, ASR chief executive Jos Baeten told the Reuters news agency.
At the same time, Generali said the sale of Generali Nederland, which contributed around €9m to the group’s operating result in 2016, would generate a one-off net loss of €270m.
However, the Italian insurer estimated that the disposal is set to lift Generali’s Solvency II ratio, a measure of financial strength, by around 1.6%.
The transaction is subject to the approval of the relevant competition and regulatory authorities and is expected to be finalized in the first half of 2018.