Within this headline figure, it was the unit-linked element on an annual premium equivalent (APE) basis that dropped 22.8%.
Alberto Minali, general manager and chief financial officer of Generali, said: “We hope this to be temporary, also because we are investigating ways in which we can also protect the unit linked portion of our products to make them more able to withstand volatility.”
In Italy APEs were overall flat while in France there was a 21.6% fall in APEs driven primarily by a 25% fall in its savings business.
“In Germany we saw a similar trend to France, with APEs declining by 21.8% and driven down by the savings component that dropped by 37.3%. Unit linked and protection sales have correspondingly increased their weight to reach almost two thirds of the total, which had a strong positive impact on margins,” Minali said.
Asia under margin pressure
But in its Americas & Asia region margins came under pressure, mainly from the business in China.
“Interest rates in China have been under substantial downward pressure, and this has challenged the economics of some lines of business. Our response has been to put significant restrictions on the sales of certain contract types, and as a consequence, you should not expect to see the same high volumes, but also not the same poor margin, later in the year.”
The Solvency II ratio was 188%, down 14 percentage points from year end 2015, which Minali said remained a very comfortable position to be in. “This is despite the clear headwinds from the financial markets which impacted not only us, but the whole insurance industry in the first quarter.”
The total operating result of the period was almost €1.2bn, down 12.3% year on year, mainly due to a weaker investment result of the life segment.
For more specifics on Generali Worldwide’s post-merger strategy and future plans, see International Adviser’s latest life trends profile.
