Earnings Release • Jul 12, 2016
Earnings Release
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| Informazione Regolamentata n. 0018-67-2016 |
Data/Ora Ricezione 12 Luglio 2016 19:00:24 |
MTA | ||
|---|---|---|---|---|
| Societa' | : | ASSICURAZIONI GENERALI | ||
| Identificativo Informazione Regolamentata |
: | 76945 | ||
| Nome utilizzatore | : | ASSGENERN05 - AMENDOLAGINE | ||
| Tipologia | : | AVVI 16 | ||
| Data/Ora Ricezione | : | 12 Luglio 2016 19:00:24 | ||
| Data/Ora Inizio Diffusione presunta |
: | 12 Luglio 2016 19:15:25 | ||
| Oggetto | : | outlook stable | Generali, Moody's affirms rating Baa1 and | |
| Testo del comunicato |
Vedi allegato.
12/07/2016 PRESS RELEASE Generali, Moody's affirms rating Baa1 and outlook stable
Trieste – Moody's announced today that it has affirmed the Baa1 IFS rating on Assicurazioni Generali SpA. Concurrently the rating agency has affirmed the ratings of debt instruments issued or guaranteed by Generali (Baa2 senior debt; Baa3 senior subordinated debt; Ba1(hyb) preference stock). The outlook remains Stable.
Moody's said that "the affirmation of Generali's ratings with a stable outlook reflects the group's strong and diversified business profile, as well as the improvements in profitability and capitalisation over the recent years. Moody's views Generali's business profile as strong thanks to very good market positions in its main markets, notably Italy, Germany and France, a predominance of retail business, which is typically less volatile than the commercial business, and very good geographic and business diversification. The stable outlook also reflects Moody's expectations that the impact of low interest rates and of the volatility in financial markets will remain moderate on Generali's profitability and capital".
Please find attached Moody's original press release
THE GENERALI GROUP
Media Relations T +39.040 671577 [email protected]
Investor Relations T +39.040.671202 +39.040.671347 [email protected]
www.generali.com
The General Group is among the world's leading insurers, with total premium income exceeding €74 billion in 2015. With above 76,000 workers in the world, present in over 60 Countries, the Group has a leading position in Western European Countries and an ever more significant presence in the markets of Central and Eastern Europe and in Asia. In 2015, Generali was the sole insurance company included among the 50 smartest companies in the world by the MIT Technology Review.
London, 12 July 2016 -- Moody's Investors Service has today affirmed all the ratings of Assicurazioni Generali S.p.A (Baa1 insurance financial strength; Baa2 senior debt; Baa3 senior subordinated debt; Ba1(hyb) preference stock), the third largest insurance group in Europe headquartered in Italy, with a stable outlook. Moody's also affirmed the ratings of Generali's main subsidiaries. A full list of ratings affected by the rating action is available at the end of this press release.
The affirmation of Generali's ratings with a stable outlook reflects the group's strong and diversified business profile, as well as the improvements in profitability and capitalisation over the recent years. Moody's views Generali's business profile as strong thanks to very good market positions in its main markets, notably Italy, Germany and France, a predominance of retail business, which is typically less volatile than the commercial business, and very good geographic and business diversification. The stable outlook also reflects Moody's expectations that the impact of low interest rates and of the volatility in financial markets will remain moderate on Generali's profitability and capital.
Moody's adds that Assicurazioni Generali S.p.A's Baa1 insurance financial strength rating remains constrained by the credit quality of the sovereign of Italy (Baa2, stable outlook) given the group's operating and asset exposure to Italy. Italian sovereign bonds represented 17% of Generali's total investments (at market value) and 257% of the group's shareholders' equity as of 31 March 2016, while the group sourced 34% of its premiums and 39% of its life and P&C operating profits from Italy in 2015. The Baa1 rating is one notch above the sovereign rating, given the group's diversification outside of Italy and the group's ability to share potential investment losses with policyholders in its life business.
According to Moody's, Generali has been improving its resilience to a hypothetical scenario of stress on Italian assets, thanks to (1) a decrease in the exposure to Italian government bonds, both on an absolute nominal value basis and as a proportion of its investments, (2) a change in business mix in life insurance with an increased weight of unit-linked policies (unit-linked represented 17% of the life Italian premiums in 2015 vs 4% in 2012) and (3) an improvement in capital, as illustrated for example by the increase in the group's economic capital ratio (which increased to 202% at year-end 2015 from 186% at year-end 2014).
Nonetheless, Moody's mentions that Generali's economic capital ratio declined in the first quarter of 2016 (to 188%), following the sharp decline in interest rates and decline in equity markets, and has likely further been affected by market movements in the second quarter of the year, even if the sensitivities of this ratio to market movements are moderate. Positively, Moody's expects this ratio to recover over time thanks to the group's earnings generation (which represented 16 percentage points of the ratio in 2015 before dividend distribution and 11 percentage points after dividend).
Commenting on the impact of low interest rates, Moody's says that the decline in rates will affect the group's investment return. Nonetheless, the rating agency believes that Generali has a high ability to pass a meaningful portion of this decline to policyholders by reducing credited rates in its life business. Moody's mentions that Generali's current investment return was 3.4% in 2015, which is 160bps higher than the average guaranteed rate (1.8%). Moody's adds that the group's ability to reduce credited rates is very high in France and Italy, but lower in Germany (which represents around one third of the group's life liabilities).
Commenting further on profitability, Moody's mentions that some of the recent improvements in the group's profitability resulted from a strong performance of the Italian business. Moody's expects the profitability of the Italian P&C business to deteriorate in the next 12-18 months given the strong price competition in this market. Recent volatility in financial markets will also likely affect the group's ability to shift its new life production from traditional guaranteed products to unit-linked products. Nonetheless, Moody's believes that these negative developments will be partly offset by improvements in other areas, including for example a continued focus on cost reduction.
Moody's says that upwards pressure on Generali's ratings could arise in case of an improvement in the credit quality of Italy or in case of a continued improvement of the group's solvency and/or a continued reduction in exposure to Italian assets.
Conversely, Moody's says that (1) a deterioration in the credit quality of Italy, (2) a material deterioration of solvency or a significantly higher exposure to Italian assets or (3) a deterioration in operating performance also resulting in a deterioration in the group's financial flexibility, would lead to downward pressure on Generali's ratings. In addition, a deterioration in the cash flows at the holding, for example with a reduction in the cash flow coverage (available cash flows over holding interests and expenses) below 2x would place pressure on Assicurazioni Generali S.p.A's debt ratings.
Issuer: Assicurazioni Generali S.p.A
..Affirmations:
..Outlook Actions:
..Affirmations:
....Insurance Financial Strength Rating, affirmed A3
..Outlook Actions:
Issuer: AachenMuenchener Versicherung AG
Issuer: Advocard Rechtschutzversicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Central Krankenversicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Cosmos Lebensversicherungs-AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Cosmos Versicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Dialog Lebensversicherungs-AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Envivas Krankenversicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali Deutschland Pensionskasse AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3
..Outlook Actions: ....Outlook remains Stable Issuer: Generali Lebensversicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali Versicherung AG ..Affirmations: ....Insurance Financial Strength Rating, affirmed A3 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali IARD ..Affirmations: ....Insurance Financial Strength Rating, affirmed Baa1 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali Vie ..Affirmations: ....Insurance Financial Strength Rating, affirmed Baa1 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali Italia S.p.A. ..Affirmations: ....Insurance Financial Strength Rating, affirmed Baa1 ..Outlook Actions: ....Outlook remains Stable Issuer: Generali Finance B.V. ..Affirmations: ....Backed Junior Subordinated Regular Bond/Debenture, affirmed Ba1(hyb) ....Backed Junior Subordinate Medium-Term Note Program, affirmed (P)Ba1 ....Backed Senior Unsecured Medium-Term Note Program, affirmed (P)Baa2
....Backed Senior Subordinate Medium-Term Note Program, affirmed (P)Baa3
..Outlook Actions:
The principal methodologies used in rating Assicurazioni Generali S.p.A, Generali Deutschland AG, Generali Italia S.p.A. and Generali Finance B.V. were Global Life Insurers published in April 2016, and Global Property and Casualty Insurers published in June 2016. The principal methodology used in rating AachenMuenchener Lebensversicherung AG, Cosmos Lebensversicherungs-AG, Dialog Lebensversicherungs-AG, Generali Deutschland Pensionskasse AG, Generali Lebensversicherung AG and Generali Vie was Global Life Insurers published in April 2016. The principal methodology used in rating AachenMuenchener Versicherung AG, Advocard Rechtschutzversicherung AG, Central Krankenversicherung AG, Cosmos Versicherung AG, Envivas Krankenversicherung AG, Generali Versicherung AG and Generali IARD was Global Property and Casualty Insurers published in June 2016. Please see the Ratings Methodologies page on www.moodys.com for a copy of these methodologies.
For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
The person who approved Assicurazioni Generali S.p.A and Generali Finance B.V. credit ratings is Simon Harris, MD-Gbl Ins and Mgd Invests, Financial Institutions Group, JOURNALISTS: 44 20 7772 5456, SUBSCRIBERS: 44 20 7772 5454. The person who approved Generali Deutschland AG, AachenMuenchener Lebensversicherung AG, AachenMuenchener Versicherung AG, Advocard Rechtschutzversicherung AG, Central Krankenversicherung AG, Cosmos Lebensversicherungs-AG, Cosmos Versicherung AG, Dialog Lebensversicherungs-AG, Envivas Krankenversicherung AG, Generali Deutschland Pensionskasse AG, Generali Lebensversicherung AG, Generali Versicherung AG, Generali IARD, Generali Vie and Generali Italia S.p.A. credit ratings is Antonello Aquino, Associate Managing Director, Financial Institutions Group, JOURNALISTS: 44 20 7772 5456, SUBSCRIBERS: 44 20 7772 5454.
The below contact information is provided for information purposes only. Please see the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead analyst and the Moody's legal entity that has issued the ratings.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.
Benjamin Serra VP - Senior Credit Officer Financial Institutions Group Moody's France SAS 96 Boulevard Haussmann Paris 75008 France JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454
Simon Harris MD-Gbl Ins and Mgd Invests Financial Institutions Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454
Releasing Office: Moody's Investors Service Ltd. One Canada Square Canary Wharf London E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454
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