Unipolsai — Earnings Release 2020

May 15, 2020

Informazione Regolamentata n. 0230-81-2020		Data/Ora Ricezione 15 Maggio 2020 06:57:28	MTA
Societa'	:	UNIPOLSAI
Identificativo Informazione Regolamentata	:	132484
Nome utilizzatore	:	UNIPOLSAIN08 - Giay
Tipologia	:	3.1
Data/Ora Ricezione	:	15 Maggio 2020 06:57:28
Data/Ora Inizio Diffusione presunta	:	15 Maggio 2020 06:57:28
Oggetto	:	Press release UnipolSai: consolidated results as at 31 March 2020 approved
Testo del comunicato

Vedi allegato.

UNIPOLSAI: CONSOLIDATED RESULTS AS AT 31 MARCH 2020 APPROVED

• The quarter was marked by the Group's strong commitment to tackling the Covid-19 emergency.
• Consolidated net profit of €171m (€184m in the first quarter of 2019, -7.2%)
• Direct insurance income of €3.1bn
  • Non-life business: €2.0bn (-1.5%)
  • Life business: €1.1bn (-13.2%)
• Combined ratio net of reinsurance 92.0%, an improvement on 94.6% recorded as at 31 March 2019

Bologna, 15 May 2020

The Board of Directors of UnipolSai Assicurazioni S.p.A., which met yesterday under the chairmanship of Carlo Cimbri, approved the consolidated results as at 31 March 2020. In a quarter marked by the outbreak of the Covid-19 emergency, the Group supported significant projects in favour of the customers, the agency distribution network, the employees and the community.

With regard to its customers, the Group took substantial action: it extended the daily allowance to any insured parties put into quarantine at home after testing positive for Covid-19 at no additional cost; it also established a Coronavirus medical consultation service available 24/7 for its policyholders through the UniSalute Medical Centre, and set up a specialist video consultation service to help people directly in their homes.

UnipolSai created the #AndràTuttoBene healthcare protection product which provides a daily hospitalisation allowance of €100 and €3,000 in compensation for employees of subscriber companies who need intensive care. Ten thousand companies had subscribed to this product by the end of April, providing coverage against Covid-19 to over 600,000 employees.

UniSalute also registered subscription to the new insurance cover by a number of healthcare funds, insuring over 5 million people against the effects of the pandemic.

Following the lockdown and resulting reduction in mobility, the Unipol Group was the first company on the Italian insurance market to decide to pass on the benefits to the community.

In that light, at the beginning of April, the #UnMesePerTe campaign was launched to reimburse each of the 10 million UnipolSai customers with an amount equal to a month's car insurance through a discount-voucher to be used when renewing their policies already in place. The campaign will last for a full year to enable all the policyholders to use their vouchers when renewing their policies.

With regard to the agency distribution network, significant financial support measures were introduced to cope with the reduction in liquidity generated by the temporary reduction in takings.

Medical services were also implemented for the agents, sub-agents and employees of the agency networks and to contribute financially to the supply of healthcare materials for the agencies, and to make masks and disinfectants available.

These measures involved over 2,500 agencies and 30,000 business partners.

Remote working mechanisms were also introduced for the Group's employees to safeguard their health, with technological solutions implemented in just a few weeks to enable about 9,000 people to work from home.

In the first quarter of 2020, UnipolSai Assicurazioni donated €20m to the community to help combat the Coronavirus emergency.

In the areas most affected in Italy - Lombardy, Piedmont, Emilia Romagna and Marches - Unipol, in close cooperation with the authorities and the civil protection authority, allocated said resources to increase the number of beds in hospitals, especially in intensive care and semi-intensive care units, and to purchase the necessary healthcare equipment to help stop the epidemic from spreading. Further donations were also made to the State Police, the Carabinieri, the Finance Police and the Firefighters in order to support their important activities in the territory.

Approval of the consolidated results

Summary of the main Group figures

	Amounts in €m	31/3/2020	31/3/2019	%Change
Direct insurance income		3,119	3,322	(6.1)
Non-life direct insurance income		1,980	2,010	(1.5)
Life direct insurance income		1,139	1,312	(13.2)
Combined ratio non-life - direct business		90.0%	93.4%
Combined ratio non-life - net of reinsurance		92.0%	94.6%
Consolidated net profit		171	184	(7.2)
	Amounts in €m	31/3/2020	31/12/2019	%Change
Investments and cash and cash equivalents		63,755	66,369	(3.9)
Shareholders' equity attributable to the Group		5,681	6,878	(17.4)
Individual solvency ratio - Partial Internal Model		226%	284%

The UnipolSai Group ended the first quarter of 2020 with a consolidated net profit of €171m compared to a profit of €184m in the corresponding period of the previous year, reflecting the ongoing healthcare emergency.

Direct insurance income, including reinsurance ceded, stood at €3,119m in the first quarter of 2020 (€3,322m as at 31 March 2019, -6.1%).

Non-Life Business

Non-life direct income as at 31 March 2020 amounted to €1,980m, reflecting the effects of the healthcare emergency with a drop of 1.5% from the figure of €2,010m as at 31 March 2019. MV premiums amounted to €1,022m, down 2.0% on the figures for the first quarter of 2019, while non-MV premiums amounted to €958m (-1%). UnipolSai S.p.A. recorded non-life premiums of €1,665m, down 1.1% compared to 31 March 2019.

The combined ratio of the Group direct business stood at 90.0% (92.0% net of reinsurance), an improvement on the figure of 93.4% as at 31 March 2019 (94.6% net of reinsurance), with a loss ratio of 63.1% compared to 66.6% in the first quarter of 2019, and an expense ratio of 27.0% (26.8% as at 31 March 2019). The stop put on manufacturing activities and consequent significant reduction in road traffic from the second week of March influenced these figures.

Life Business

In the first three months of this year, the UnipolSai Group registered a fall in revenue of 13.2% in the life business, with direct income of €1,139m as at 31 March 2020.

PRESS RELEASE

UnipolSai S.p.A. reported €832m in direct income (-3.0%), while in the bancassurance channel, Arca Vita S.p.A., along with its subsidiary Arca Vita International reported direct income of €293m (compared to €430m in the first quarter of 2019).

Real Estate Business and Other Businesses

There were no significant changes in real estate operations, while activity involving the construction or renovation of buildings has been delayed due to the healthcare emergency.

With regard to the other businesses that the Group operates in, the Covid-19 pandemic is having an adverse effect on the hotel business and so most of the hotels under management were ordered to close in March 2020. The Gruppo UNA reported a loss of €5.8m as at 31 March 2020 (compared to a loss of €4.4m in the first quarter of 2019).

Financial Management

The gross return on the Group's financial insurance investment portfolio in the first quarter of 2020 amounted to 3.5% of the invested assets even though adversely affected by the negative performance of the financial markets (3.9% as at 31 March 2019).

Balance Sheet

The consolidated shareholders' equity amounted to €5,949m as at 31 March 2020 (€7,153m as at 31 December 2019). The drop was mainly due to the effects of the negative performance of the financial markets which influenced the reserve for profits or losses on financial assets available for sale. The shareholders' equity attributable to the Group amounted to €5,681m (€6,878m as at 31 December 2019).

As at 31 March 2020, the individual UnipolSai solvency ratio (the ratio between own funds and capital requirements) amounted to 226%, down from 284% as at 31 December 2019, reflecting the effects of the drop in value of the Group financial investments. The consolidated solvency ratio based on the economic capital1 was 200% (252% at 31 December 2019).

¹ The economic capital method is the measure of absorbed capital calculated on the basis of the principles and models applied in the partial internal model and having operational value.

Business Outlook

The first part of 2020 was marked by the extension of the Covid-19 pandemic all over the world. As things stand, it is difficult to estimate how long the pandemic will last, its extent, or to quantify the negative effects that it could have on the economic cycle.

With regard to insurance business trends, starting from the last week of February, there was a reduction in new business due to the increasingly stringent orders by the government in terms of mobility of persons, and a reduction in the number of claims with regard to the non-life businesses.

On the basis of the information available at the moment and current industrial trends, the Group believes that it will be capable of fulfilling the objectives of the Strategic Plan. Unless any extraordinary events occur, which cannot be predicted at the moment, or other significant effects on the financial markets due to the healthcare and economic crisis, the consolidated Group results for this financial period are expected to be positive.

Corporate Governance

Independence of the Directors

The board of directors checked to see whether non-executive director, Roberto Pittalis, appointed by the ordinary shareholders' meeting of the Company on 29 April 2020, fulfilled the independence requirements.

The results of that assessment showed that Mr Pittalis can be classified as a non-independent director in accordance with the code of Conduct of listed companies (the "Code") and article 148, paragraph 3 of the Consolidated Law on Finance.

At its board meeting, the board also carried out one of its periodic assessments to check whether the other non-executive directors fulfilled the independence requirements.

After the assessments - within the scope of which the positions of the individual directors were examined - the board of directors confirmed that 11 directors (unchanged from the previous assessment) continue to be meet the independence requirements in accordance with the Code and article 148, paragraph 3 of the Consolidated Law on Finance, also taking account of the applicable provisions of the Fit&Proper Policy adopted by the Company, and more specifically: Lorenzo Cottignoli, Cristina De Benetti, Massimo Masotti, Maria Rosaria Maugeri, Maria Lillà Montagnani, Nicla Picchi, Giuseppe Recchi, Elisabetta Righini, Antonio Rizzi, Barbara Tadolini and Francesco Vella.

Independence of the Statutory Auditors

The board of directors also carried out its periodic assessment to check whether the board of statutory auditors fulfilled the independence requirements.

After the assessments - within the scope of which the positions of the individual statutory auditors were examined - the board confirmed that all the members of the board of statutory auditors continued to fulfil the independence requirements set out under article 148, paragraph 3 of the Consolidated Law on Finance, and more specifically: Paolo Fumagalli (chairperson), Giuseppe Angiolini and Silvia Bocci (standing auditors), Sara Fornasiero, Luciana Ravicini and Domenico Livio Trombone (alternate auditors).

The board of directors acknowledged the results of the self-evaluation carried out by the board of statutory auditors regarding the independence of its standing members, in accordance with the Code, meeting the same requirements as provided for the directors. To that end, the board of statutory auditors confirmed that all its standing members can be considered to hold the abovementioned independence requirements.

Presentation of results to the financial community

A conference call will be held at 12:00 pm today during which financial analysts and institutional investors may submit questions to the Group CEO and senior management on the consolidated results at 31 March 2020. The phone numbers to dial to attend the event are: +39 02 8058811 (from Italy and other countries), +1 718 7058794 (from the USA) and +44 1212 818003 (from the UK). The multimedia file with the pre-recorded comment on the results can be found in the Investors section of the website www.unipolsai.com.

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Maurizio Castellina, Manager in charge of financial reporting of UnipolSai Assicurazioni S.p.A., declares, pursuant to Article 154-bis, paragraph 2, of the Consolidated Law on Finance, that the accounting information contained in the presentation corresponds to the figures in corporate accounting records, ledgers and documents.

Please refer to the press releases that can be downloaded from www.unipolsai.com for any significant events after 31 March 2020.

Glossary

DIRECT BUSINESS COMBINED RATIO: indicator that measures the balance of Non-Life direct technical management, represented by the sum of the loss ratio (ratio between direct claims for the period + other technical charges and direct premiums earned) and the expense ratio (ratio between operating expenses and direct premiums recognised).

COMBINED RATIO AFTER REINSURANCE: indicator that measures the balance of Non-Life total technical management, represented by the sum of the loss ratio (ratio between claims for the period + other technical charges and premiums earned) and the expense ratio (ratio between operating expenses and premiums earned).

UnipolSai Assicurazioni S.p.A.

UnipolSai Assicurazioni S.p.A. is the insurance company of the Unipol Group, Italian leader in the Non-Life Business, in particular in MV and Health. Also active in Life Business, UnipolSai has a portfolio of over 10 million customers and holds a leading position in the national ranking of insurance groups with a direct income amounting to approximately €14.0bn, of which €8.2bn in Non-Life Business and €5.8bn in Life Business (2019 figures). The company has the largest agency network in Italy, with about 2,500 insurance agencies spread across the country. UnipolSai is also active in direct MV insurance (Linear Assicurazioni), transport and aviation insurance (Siat), health insurance (UniSalute), supplementary pensions and also covers the bancassurance channel (Arca Vita, Arca Assicurazioni and Incontra). It also manages significant diversified assets in the real estate, hotel (Gruppo UNA), medical-healthcare and agricultural (Tenute del Cerro) sectors. UnipolSai Assicurazioni is a subsidiary of Unipol Gruppo S.p.A. and is also listed on the Italian Stock Exchange.