Assicurazioni Generali Group
Unicredit Financials Conference
Pedro Martins - Head of IR
Stockholm, May 31th, 2007 Agenda 2
The Strategic Plan 2006 - 2008
Expansion in CEE
1Q07 Quarterly results
Back up
Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Going forward: The ‘06 – ‘08 plan 3
RoEV normalised (%)
Targets 2008 2003 – 2005: We delivered on our plans IFRS profit: +50%
NBV: 11.9 +10% CAGR 11.2 10.8
Combined Ratio: 9.2 95.5% RoEV = 14.5%*
Top-line growth: sustained above- market growth
Dividend: ’02 ‘03 ‘04 ‘05 € 0.54 for 2005, ‘05 target (11.9%) delivered with a 2.7 p.p. +100% for 2008 increase in 3 years
* Based on 10-year risk free rate of 3.7%
Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Generali’s ‘06-’08 Strategic Plan: The pillars 4
Operational improvement
The balance among Risk, Return & Growth
Enhanced governance Growth & This is the essence of Generali’s innovation ‘06-’08 Strategic Plan Capital optimisation
Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Common Country model 5
From complexity and fragmentation… … to simplicity and consolidation
Administrative Administrative Administrative Administrative services and services and services and services and procurement procurement procurement procurement
IT IT IT IT
Claims Claims Claims Management Management Management Claims Management
Strategic Strategic Strategic marketing & marketing & marketing & Strategic marketing & product product product product development development development development
Client and channel Client and channel Client and channel Client and channel Client and channel Client and channel management, management, management, management, management, management, product product product product product product customisation and customisation and customisation and customisation and customisation and customisation and post sale post sale post sale post sale post sale post sale
Company A Company B Company C Brand A Brand B Brand C
1 single brand in specific market situations
Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Strategic initiatives taken 6
Capital 9 AMB (Share: Increased to 85.05%) Optimisation: 9 Generali Holding Vienna (Share: Increased to 100%) 9 Generali Schweiz Holding (Share: Increased to 100%) Minorities & 9 Migdal (Share: Increased to 69.8%) Hybrid 9 Euro 4.8 bln of hybrid debt issued
Growth and 9 Acquisition of 98.44% of Toro innovations: 9 Four key acquisitions in CEE growth markets: Acquisition of majority shareholding in Delta Osiguranje, Serbia’s largest private insurance company (Life and P&C) Acquisitions Acquisition of 100% of Libertas insurance company (Croatian life insurer) & J.V. Acquisition of 51% of Garant Auto and Garant Life Acquisition of a 86% shareholding in Orel-G Holding, leading insurance player in Bulgaria 9 Strategic expansion in India: JV agreement with Pantaloon Retail, leading retailer and set up of Future Generali JV (Life and P&C) 9 Acquisition of Banca Unione di Credito, with AuM of CHF 4.6 billion (Private financial services provider in Switzerland)
Operational 9 Simplification and rationalisation of corporate organisation and business structure in Italy Improvement: Merger of Generali Vita and Assicurazioni Generali S.p.A. Integration of INA and Assitalia under the INA Assitalia brand name 9 Integration of Italian activities of BSI into Banca Generali and IPO of Banca Generali Restructuring 9 Reorganisation of French activities Initiatives 9 Reorganisation of Asset Management activities
Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Progress Report on Group Strategic Programs: Overview 7
Completed
In progress Target Implemen- Diagnostic Model Pilot tation Program design
1. Asset Management
2. Risk Management Scale-based Programs 3. IT Consolidation
(1) 4. Group Treasury
5. Motor Tariff
6. Claims Management Skill-based Programs 7. Operational Excellence
8. Innovation Lab
New Project announced in 9. Third age November 06
(1) Started pilot in Italy Unicredit Financials Conference – May 31th, 2007 The Strategic Plan 2006 - 2008
Progress of Toro Group integration projects 8
Integration projects into Generali Group platforms
Completed Asset HR Group Benefits from 2007 Management Administration Purchasing
Started I. T. Risk Management Holding Benefits from 2007/08 & Underwriting
Master Plan Administration Claims Operations started Benefits from 2008/09
Synergies
Annual synergies expected at group level Expected 60mln in 2007 within 2007: Euro 60 mln
Achieved 22mln Synergies already achieved in March: Euro 22mln
Synergies to be re-assessed after the completion of all master plans and after TAR’s decision concerning Nuova Tirrena.
Unicredit Financials Conference – May 31th, 2007 Agenda 9
The Strategic Plan 2006 - 2008
Expansion in CEE
1Q07 Quarterly results
Back up
Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
Delivering on our promises 10
Excerpt of our 2006-2008 Strategic Plan presentation (March 2006)
Exploiting geographical CEE and Former Soviet Union opportunities Organic growth: Operational – Greater than 20% growth per annum in markets with relative improvement Focus on attractive low penetration (Slovakia, Slovenia, Romania and Croatia) markets Pursuit of M&A based growth
China Enhanced Positioning among top foreign governance Continue to build up local JVs and growth of Agency leadership positions Capital Growth & force ( >10,000 individuals) innovation optimisation Strengthening our India P&C license already granted distribution Market entry via green field Access to 6 new cities by ‘08 capabilities operation Established bancassurance Realise Group Joint venture agreement agreements with major advantages signed in May 2006 domestic banks Composite approach
Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
JV with PPF Group: overview of the proposed deal 11
Generali and PPF have signed a preliminary Joint Venture agreement, to be finalized in the coming weeks, according to which both partners will contribute their insurance related assets in the CEE region to a new Generali PPF Holding. Closing expected in second half 2007
Generali majority shareholder of the Generali PPF Holding with 51% (PPF at 49%) In addition to contribution of assets, Generali will pay € 1.1 billion in cash to achieve 51% of the Generali PPF Holding Long term commitment of the two parties to jointly develop the business in CEE and CIS, through: organic growth, M&A and cooperation with Home Credit (consumer lending/banking arm of PPF)
The new JV will become the leading insurer in the CEE region and will constitute a strong growth platform for the high-potential CIS countries
Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
Summary considerations 12
Strategic rationale Transaction Impact on Generali’s financials
Consistent with Generali Relative valuations: Immediately accretive*: strategy Ceska Pojistovna Group: 2.2% on IFRS earnings by High growth markets € 3.6 bn 2008 Right JV partner Generali CEE: € 1.5 bn 2.1% on EV earnings by 2008 Scale and diversification In addition to contribution of benefits assets, Generali will pay 0.6pp on RoEV by 2008 € 1.1 billion in cash to Enhanced pool of 10.3% ROI** by 2009 (incl. achieve 51% of the JV management talent only cost synergies) Time-limited earn out on Material cost and revenue Reduction of ~ € 0.9 bn of performance above hurdle on synergies excess capital acquired JV shares Strategic optionality Expected to be neutral to Call option to Generali in Generali financial strength case of deadlock and ratings material default Put option to PPF in certain cases
* initial estimates pending joint business plan ** on EV earnings basis Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
The proposed JV will create the #1 geographical footprint in the CEE region 13 with presence in 12 countries Market share
Czech Rep Slovakia Life Non-life Life Non-life 32.3% 40.6% 9.2% 12.1% Estonia
Russia Latvia Poland Hungary Poland Hungary Lithuania Russia Life Non-life Life Non-life Belarus 2.3% 1.5% 10.1% 20.2% Poland
Czech Romania Slovenia Republic Ukraine Romania Slovenia Slovakia
Life Non-life Life Non-life Austria Moldova Hungary 3.6% 5.9% 4.2% 2.3% Slovenia Croatia Romania
Bosnia-Herz.
serbia Bulgaria Bulgaria Croatia Macedonia Life Non-life Life Non-life Albania 9.6% 5.8% 7.0% 1.1%
Serbia Russia Serbia Russia Ukraine Kazakhstan Life Non-life Life Non-life Life Non-life Operational in 2007. 17.7% 10.5% 0.2% 0.7% 8.1% 8.6% Coop. with Home Credit
Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
Attractiveness of JV approach: complementarity for future growth 14
Strengths of Generali CEE Strengths of PPF/CP Group
Scale and capabilities (core Life Regional expertise and Non-Life, risk mgmt, asset Dynamic and entrepreneurial mgmt, treasury, IT, reinsurance,…) approach with proven track record Financial resources to support in turn around as well as business growth building Diversified presence in the region Networking and access to Home Credit distribution throughout the Global Asset Management region, especially in Russia Global Leadership in Assistance (Europe Assistance)
To create a solid and aggressive platform for growth for CEE and Russia
Growth Organic + M&A + cooperation with Home Credit Profitability Best-in-class technical and commercial capabilities + scale effect + Generali Group core competencies
Unicredit Financials Conference – May 31th, 2007 Expansion in CEE
The cooperation will create significant value for both partners 15
Strengthen distribution channels and product range Cross-selling of product and cross-fertilisation
Strategic optionality Joint expansion in new Enhanced pool of talents markets: scout for Strong management with a opportunities, both for organic proven successful track-record and external growth
Value creation
Potential high synergies Scale and diversification Generali’s best practice Unique breadth of presence coupled with PPF’s local market across the entire area knowledge
Business fit Geographic complementarity
Unicredit Financials Conference – May 31th, 2007 Agenda 16
The Strategic Plan 2006 - 2008
Expansion in CEE
1Q07 Quarterly results
Back up
Unicredit Financials Conference – May 31th, 2007 1Q07 Quarterly results
Q1 2007 key data 17
Gross premiums (Euro bln) Operating result (Euro mln) Net result (Euro mln)
+4.4% historical +20.7% +19.6% 18.5 +1.6% like for like 17.7 1,381 5.6 6.4 1,144 P&C 598 715
12.1 12.1 Life(1)
1Q06 1Q07 1Q06 1Q07 1Q06 1Q07 (1) Including investment contracts
Shareholders’ equity (Euro bln) Combined ratio (%) Life expense ratio (%)
+5.1% -2.0%pts. +0.3%pts.
95.9 15.2 16.0 9.4 9.7 93.9
FY06 1Q07 1Q06 1Q07 1Q06 1Q07
Unicredit Financials Conference – May 31th, 2007 1Q07 Quarterly results
Life premiums 18
Gross written premiums(1) (Euro mln) Life APE (Euro mln)
-0.2% historical
12,113 +0.5% like for like +6.6% 12,088 1,057 1,127
1Q06 1Q07 1Q06 1Q07
(1) Including investment contracts for € 306 mln in 1Q07 and € 230 mln in 1Q06.
Unit Linked Inv. Contracts 19.8% 2.5% Life business: 65% of consolidated premiums Health Continued focus on high value production: 6.8% APE up 6.6% Group 11.1% Good development in France, Spain, Eastern Traditional Europe and South America 58.2% Reinsurance 1.6%
Unicredit Financials Conference – May 31th, 2007 1Q07 Quarterly results
P&C premiums 19
Gross written premiums (Euro mln) Premiums breakdown (%)
(1) +14.5% historical Motor Accident / health 45.6% 12.3% +3.9% like for like
6,393 Other retail 5,584 19.3%
Reinsurance Commercial 2.0% 20.8% 1Q06 1Q07 (1) Including fleets
P&C business: 35% of consolidated premiums after Toro acquisition Retail oriented business mix Satisfactory growth rates, especially in Italy, France, Spain and Eastern Europe
Unicredit Financials Conference – May 31th, 2007 1Q07 Quarterly results
P&C profitability – Net combined ratio 20
Group combined ratio (%) Combined ratio by country (%)
-2.0%pts.
1Q06 1Q07
95.9 (0.3) Italy(1) 94.2 91.5 (1.7) Germany 97.1 97.4 France 96.7 96.3 93.9 Spain 86.6 86.5 Austria 95.6 96.9 Switzerland 96.2 96.7 CEE 94.1 95.3 RoW 96.8 95.9 Total 95.9 93.9
1Q06 U Expense U Loss 1Q07 (1) Excluding foreign branches; 1Q06 not including Toro Group ratio ratio
Unicredit Financials Conference – May 31th, 2007 Agenda 21
The Strategic Plan 2006 - 2008
Expansion in CEE
1Q07 Quarterly results
Back up
Unicredit Financials Conference – May 31th, 2007 Back up
The Generali Group: Mission 22
We aim to be a leading Insurance Group
Measured by profitability…
focused on continental Europe…
and selected international growth markets…
serving retail customers and small and medium enterprises…
reached through multi-channel distribution
Unicredit Financials Conference – May 31th, 2007 Back up
The Generali Group: At A Glance 23
Euro 60.4 bln net premiums (FY06) Euro 299.8 bln in reserves (FY06) Leading insurer Niche presence in 3rd party asset management; no commercial or corporate banking Number of employees: 66,003 as at 31st December 2006 Ranked #69 in the 2005 FORBES 2000 Pan-European Historical leader in Italy player Top-tier presence in all key markets except UK
Agents Multi-channel/ Financial advisors multi-brand Banc assurance distribution Third party agreements Direct (telephone, internet)
Strong rating from key agencies Strong capital base Conservative asset allocation Euro 4.3 bln excess capital at YE06 (1)
(1) Excess capital is the sum of excess equity (pro-forma after dividend) and subordinated debt
Unicredit Financials Conference – May 31th, 2007 Back up
Ratings 24
S&P AA, outlook stable
Moody’s Aa3, outlook negative
AM Best A+, outlook stable
Fitch Ibca AA, outlook stable
Unicredit Financials Conference – May 31th, 2007 Back up
The Generali Group: Shareholder Structure 25 (%)
Retail 14.10 Mediobanca Shareholders 4.47 Banca d’Italia 33.55% Leading 3.70 Gruppo Unicredito Shareholders (>2%) 34.08% 2.82 Gruppo Capitalia 2.42 Gruppo Premafin 2.30 Gruppo IntesaSanPaolo Institutional Shareholders 2.27 Gruppo Carlo Tassara 32.37% 2.00 Gruppo B&D Holding
Rest of World Italy 1% 12%
UK - Ireland North America 27% 11%
Continental Europe 49%
Unicredit Financials Conference – May 31th, 2007 Back up
Group Organisational Structure: Geographic Focus 26
THE GENERALI GROUP IN THE WORLD
Principal Markets of Operation Central East. Europe Asia Americas Other Countries
Italy Poland China Argentina Belgium Assicurazioni Generali; Generali Zycie T.U.S.A. Generali China Life Caja de Seguros Generali Belgium Generali - Direzione Italia; Generali T.U.S.A. Hong Kong Branch Generali Corporate Generali Vita; Alleanza; Ina; Intesa Vita; Generali PTE Assitalia; Toro; Genertel; Generali Netherlands Properties; Banca Generali; Generali Thailand Brazil Generali Verzekerings- Asset Management Czech Rep. Generali Thailand Generali do Brasil groep Generali Pojistovna Assurance Generali Thailand Germany Insurance Mexico Greece AMB Generali Holding * Slovakia Seguros Banorte Generali Hellas Aachen Münchener; Volksfürsorge; Generali Poistovna Philippines Generali Generali Life Generali Versicherungen; VUB Generali Pensiones Banorte Generali Pilipinas Life Generali CosmosDirekt; Envivas Kranken; Assurance Dialog Lebensversicherungs; UK Generali Pilipinas UK Branch AMBGenerali Pensionkasse Slovenia Insurance USA Central Kranken; Advo Card; Generali Zavarovalnica Generali USA Life AMB Generali Immobilien; Reassurance Portugal Badenia Bausparkasse; Generali Vida AMB GeneraliAssetManagers Croatia Generali osiguranje Guatemala Delegaçao em Portugal Generali zitovno Aseguradora General France osiguranje Ecuador Turkey Generali France*; Assurance France Generali Sigorta Generali*; Generali Assurances; Generali Ecuador La Fédération Continentale; Romania Colombia GPA Assurances; Europ Assistance; Generali Asigurari Generali Colombia Guersney Prudence Vie; L’Equité; Generali Colombia Vida Generali Worldwide Generali Immobilier; Generali Finances Hungary Panama Generali International Generali Providencia Sucursal de Panamá Austria Európai Utazási Ireland Generali Holding Vienna* Generali Paneurope Generali Versicherungen; Europäische Reise; Generali Rueckversicherung Serbia Generali Immobilien; Generali Bank Generali Delta The Generali Group is one of the leading insurance and financial players Switzerland Ukraine Generali (Schweiz) Holding * Garant Avto in the world. It is present in 40 countries Generali Personen; Generali Grarant Life Allgemeine; Fortuna Lebens (Vaduz); Fortuna with 107 insurance companies and 119 Rechtsschutz; Fortuna Investment; BSI Bulgaria Orel-G Holding companies mostly operating in the Spain financial and real estate sectors. Generali España Holding * Vitalicio Seguros; La Estrella Seguros Cajamar Vida LEGEND: * holding to which the various companies refer Israel Companies operating (predominantly) in the life sector Migdal Insurance & Financial Group * Companies operating (predominantly) in the non-life sector Migdal Insurance; Companies operating in both the life and non-life sector Migdal Investment Management Branch Real estate companies Unicredit Financials Conference – May 31th, 2007 Companies operating in the asset management sector Back up
Generali Group main brands 27
Unicredit Financials Conference – May 31th, 2007 Back up
Business mix (FY06) 28
Total gross written premiums (GWP): Euro 64.5 bln Life GWP breakdown (%) Unit Linked Inv. Contracts Property & 20.2% 2.4% Casualty Euro 18.4 bln Health (29%) 6.4% Group 10.0% Traditional 59.0% Reinsurance 2.0%
P&C GWP breakdown (%)
Motor Accident / health 40.7% 14.4% Life & Health Euro 46.1 bln (71%) Other retail 20.5%
Reinsurance Commercial 2.6% 21.8%
Unicredit Financials Conference – May 31th, 2007 Back up
Insurance is our Core Product – 1 29
Retail and Small Medium Enterprises (SME) based Life products contribute 71% of FY '06 premiums P&C products contribute 29% of FY '06 premiums
Corporate business restricted in principle to Italy
Focus on asset gathering; acquisitions of large commercial banks/third party asset managers are not contemplated
Unicredit Financials Conference – May 31th, 2007 Back up
Insurance is our Core Product – 2 30
Personal Financial service Strategy (PFS)
Personal Financial Strategy is considered complementary to core business in order to better serve affluent segments and strengthen insurance networks
Two dedicated companies in the Group: Banca Generali Banca Svizzera Italiana (BSI) Proprietary financial adviser sales Pure private banking channel focused on asset gathering business for affluent clients in Italy Strengthen position both in Support for insurance networks in the off-shore and on-shore developing PFS business business
Unicredit Financials Conference – May 31th, 2007 Back up
Multi-Channel Distribution 31
Multi-channel, multi-brand distribution
Investment in exclusive distribution channels: Improve sales effectiveness Integrated product offer Redesign of administrative processes at the agency
Leverage factory capacity provided adequate margins (bank assurance, financial advisors (FAs), etc.)
Unicredit Financials Conference – May 31th, 2007 Disclaimer 32
Certain of the statements contained herein are statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. The user of such information should recognise that actual results, performance or events may differ materially from such expectations because they relate to future events and circumstances which are beyond our control including , among other things, general economic and sector conditions. Neither Assicurazioni Generali SpA nor any of its affiliates, directors, officers employees or agents owe any duty of care towards any user of the information provided herein nor any obligation to update any forward-looking information contained in this document.
Unicredit Financials Conference – May 31th, 2007 Assicurazioni Generali Group
Unicredit Financials Conference
Pedro Martins - Head of IR
Stockholm, May 31th, 2007