The Board of Directors of Assicurazioni Generali S.p.A , chaired by Gabriele Galateri di Genola, has approved Generali’s new three-year strategic plan, Generali 2021: Leveraging Strengths to Accelerate Growth.

Generali, the Life-time partner

The plan is aligned with the Group’s stated ambition to be a life-time partner to its customers, offering innovative, personalized solutions thanks to its unmatched distribution network and to lead the European insurance market for individuals, professionals and SMEs, while building a focused, global asset management platform and pursuing opportunities in high potential markets.

€63 billion of premiums and 150,000 salesforce

Generali today is the market leader for insurance in Europe with €63 billion of premiums and is able to leverage on a powerful distribution network comprising more than 150,000 agents and salespeople across its major markets. Following a comprehensive and successful financial (2012- 2015) and operational (2016-2018) turnaround, Generali has delivered best-in-class technical and operational performance, achieving a P&C combined ratio of 92.8% and a Life new business margin of 39.2% in 2017. Generali also successfully launched a focused asset management strategy in 2017, with €487 billion in Assets Under Management. Generali is on track to achieve all its 2018 financial and industrial targets.

Generali 2021 strategy

The Generali 2021 strategy will continue the evolution of the business and is centered around four key differentiating convictions:

• European insurance markets will remain attractive. High private wealth accumulation will support the sale of Life and Asset Management products, while demographic trends and reduced public spending will drive the development of pension, health and welfare services.
• The Retail and SME markets are driving profitable growth. Retail customers will play a key role in future insurance markets, while the SME segment is a key opportunity in core markets like Italy and Germany.
• An integrated Insurance and Asset Management offer is key for customers worldwide. Customers are seeking integrated Life and Asset Management products to protect and grow their assets, while macro and demographic shifts are increasing demand for innovative P&C and Health solutions. This integration reflects the shift in focus from ‘products’ to ‘customers’ and from “protection and indemnity” to “prevention and servicing.”
• Physical distribution is empowered and not replaced by digital platforms. Physical distribution networks will remain a competitive advantage in the industry as they are increasingly enabled by digital tools, which will allow for the delivery of higher customer satisfaction, productivity and efficiencies.

Today, Generali unveils an ambitious strategy – Generali 2021 – which will accelerate the Group’s growth and deliver superior returns to our shareholders. Our primary ambition is to become a life-time partner to our customers, offering innovative and personalized solutions thanks to an unmatched distribution network.

– said Philippe Donnet, Generali Group CEO.

Leadership consolidation and digital transformation

This clear and distinctive strategic vision leverages on our strengths to consolidate leadership in Europe on retail and SME customers, expand operations in high-potential markets and develop a global asset management platform. At the same time, Generali will continue to focus on generating and managing capital to fund growth opportunities in key markets and drive innovation and digital transformation wherever we operate. Thanks to this set of actions, Generali will achieve between 6 and 8 per cent Earnings per Share average annual growth over the plan horizon.

We look forward to implementing this new strategic plan, knowing that our track record of delivery, driven by our talented colleagues and underpinned by our strong brand and long-term culture of sustainability, will ensure its success.

– Philippe Donnet added.

Increased core profitability and greater efficiency 

As part of Generali 2021, the Group is committed to delivering growing Earnings per Share, with a target CAGR of 6% to 8% for the period 2018-21. There will be a number of contributors to this target including increased core profitability from Generali’s insurance and asset management businesses, greater efficiency with an additional expense reduction target of €200 million in mature markets by 2021, active management of interest expenses and redeployment of capital to support profitable growth initiatives.

Generali is also committed to delivering higher shareholder returns through a growing and sustainable dividend underpinned by a target pay-out ratio range of 55% to 65% over the plan period. Coherent with the official disclosure at YE 2017 of 4.01% of NBV over PVNBP 3 period. Attractive profitability will be delivered through a target average Return on Equity of more than 11.5%.

Key enablers

Generali 2021 will be supported by three key enablers which will drive the execution of the plan:

• Empower people for the future. Generali will continue to foster a customer-centric and innovative culture, nurturing global and diverse leaders and talents. Operating as an agile and adaptive organization with 100% smart working, Generali will help staff acquire new digital skills (50% target by 2021) while rewarding excellence and sustainable value creation.
• New Brand promise. Generali will ensure a consistent and distinctive brand experience built around the promise of becoming a life-time partner for its customers. Generali is targeting the best relationship Net Promoter Score among the European International players.
• Continued commitment to sustainability. Generali 2021 is aligned with the Group’s sustainability commitments. Generali also commits to grow green and social retail products by 7%-9%11 and to allocate €4.5 billion to green and sustainable investments by 2021. Key initiatives with strong sustainability footprints include a Responsible Consumer scheme and the Enterprize awards for sustainable SMEs.

Generali 2021 – Strategic Priorities & Targets

• Profitable Growth: Strengthen leadership in Europe: Reinforce #1 market position. Focus on high potential insurance markets: 15%-25% Earnings CAGR 2018-21. Develop global asset management platform: 15%-20% Earnings CAGR 2018-21.
• Capital Management and Financial Optimization: Increase capital generation: > €10.5 billion cumulative capital generation 2019-21. Enhance cash remittance: +35% cumulative cash remitted to holding 2019-21. Reduce Debt level and cost €1.5-2.0 billion debt reduction by 2021; €70-140 million reduction in annual gross interest expense by 2017.
• Innovation and Digital Transformation: Become life-time partner to customers. Enable digital transformation of distribution. Transform and digitalize operations modell.