An International dimension: every destination has a starting point Management Report and Parent Company Financial Statements Proposal 2012 Management Report and Parent Company Financial Statements Proposal 2012 www.generali.com 181st year of activity Comprehensive vision, details protection Trieste, piazza Unità d’Italia. This is where we started our journey, a journey that has made Assicurazioni Generali a sound company appreciated in Italy and worldwide. Through our comprehensive vision we can look at the countries where we operate worldwide while paying attention to details. In doing so, we Management Report and Parent Company Financial Statements Proposal 2012 Management Report and Consolidated Financial Statements 2012 Corporate Governance and Share Ownership Report 2012 Remuneration Report 2012 Comprehensive vision, details protection can create synergies between social and financial responsibility, thus creating value for every customer. This document provides our shareholders, customers, agents, employees, local and financial communities with the results of our vision, that enable us to continue taking a long view. Management Report and Parent Company Financial Statements proposal 2012 6 | Assicurazioni Generali Registered Office and Central Head Office in Trieste Head Office for Italian Operations in Mogliano Veneto Capital (fully paid in) Euro 1,556,873,283.00 Fiscal code and Trieste Companies Register 00079760328 Company entered in the Register of Italian Insurance and Reinsurance Companies under no. 100003 Parent Company of Generali Group, entered in the Register of Insurance Groups under no. 026 Gabriele Galateri di Genola CHAIRMAN Vincent Bolloré, VICE-CHAIRMEN Francesco Gaetano Caltagirone Mario Greco GROUP CEO as General Manager and Managing Director Cesare Calari, DIRECTORS Carlo Carraro, Claudio De Conto, Petr Kellner, Angelo Miglietta (*), Alessandro Pedersoli Lorenzo Pellicioli (*), Reinfried Pohl, Clemente Rebecchini (*), Paola Sapienza, Paolo Scaroni (*) Directors who, together with the Chairman, Vice-Chairmen and the Managing Director, form the Executive Committee Eugenio Colucci, Chairman BOARD OF AUDITORS Giuseppe Alessio Vernì, Gaetano Terrin Maurizio Dattilo (substitute), Francesco Fallacara (substitute) Antonio Cangeri SECRETARY OF THE BOARD OF DIRECTORS CORPORATE BODIES AS OF 13 MARCH 2013 Officers | 7 www.generali.com CONTS TAC Assicurazioni Generali S.p.A. P.za Duca degli Abruzzi 2 - 34132 Trieste, Italy Investor Relations Shareholders Department - Relations with Tel. +39 040 671402 retail shareholders Fax + 39 040 671338 Tel. +39 040 671621 [email protected] Fax + 39 040 671660 Head: Spencer Horgan [email protected] [email protected] Head: Michele Amendolagine Media relations Tel. +39 040 671085 Fax + 39 040 671127 Corporate Social Responsibility and [email protected] Group Sustainability Head: Giulio Benedetti Tel. +39 040 671060 [email protected] Head: Marina Donati 4 | Assicurazioni Generali TABLE OF CONTENTS MANAGEMENT REPORT Company highlights 12 Business environment 13 The Generali Group’s profile 17 Generali Group’s strategy 17 Social and environmental commitment 21 Part A – Information on operations 23 Part B – Risk report 49 Appendix to the Report 59 MANAGEMENT REPORT AND PARENT COMPANY FINANCIAL STATEMENTS PROPOSAL Parent Company Balance sheet and Profit and loss account Balance sheet 69 Profit and loss account 83 Notes to the Parent Company financial statements Foreword 95 Part A – Summary of significant accounting policies 95 Part B – Information on the balance sheet and the profit and loss account 102 Part C – Other information 166 Cash flow statement 173 Appendices to the notes 181 Statement relating to the solvency margin 267 Securities and urban real estate on which revaluation have been carried out 271 Companies in which an unquoted shareholding (which is higher than 10%) is held 278 ATTESTATION ON THE FINANCIAL STATEMENTS IN ACCORDANCE WITH ART. 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999 AND FOLLOWING AMENDMENTS AND INTEGRATIONS 335 BOARD OF AUDITORS’ REPORT … INDEPENDENT AUDITOR’S REPORT AND ACTUARY’S REPORT … The disclosure of the “Management Report and Parent Company financial statement proposal 2012” does not represent publication of the financial statements before the General Meeting of the Shareholders according to Article 154-ter of Legislative Decree no. 58 of 24 February 1998 - Consolidated Law on Financial Intermediation, pursuant to Articles 8 and 21 of Law 52 of 6 February 1996. The publication of the annual financial statements will be made according to the existing law provisions. 10 | ASSICURAZIONI GENERALI – Management Report and Parent Company Financial Statements RELAZIONE SULLA GESTIONE Madrid - Spagna ManageMenT rePorT Madrid - Spain COMPANY HIGHLIGHTS 2012 2011 2010 (in million euro) Financial Statement Financial Statement Financial Statement Ne t p r o fit s 130.7 325.5 633.8 Aggregate dividend 311.4 311.4 700.6 Increase 0.0% -55.6% 28.6% Total net premiums 8,634.9 8,475.8 8,731.4 Total gross premiums 9,767.0 9,429.9 9,617.5 Total gross premiums from direct business 7,089.9 6,925.2 7,114.0 Increase on equivalent terms (a) 2.5% -2.8% 1.3% Total gross premiums from indirect business 2,677.1 2,504.7 2,503.5 Increase on equivalent terms (a) 7.2% -0.4% 6.9% Acquisition and administration costs 1,248.5 1,277.5 1,273.1 Expense ratio (b) 14.5% 15.1% 14.6% Life business Total net premiums 5,302.1 5,182.8 5,499.0 Life gross premiums 5,555.8 5,416.1 5,689.6 Increase on equivalent terms (a) 2.6% -5.1% 3.7% Life gross premiums from direct business 3,747.2 3,645.9 3,867.6 Increase on equivalent terms (a) 2.7% -5.8% 3.2% Life gross premiums from indirect business 1,808.6 1,770.2 1,822.0 Increase on equivalent terms (a) 2.4% -3.5% 4.9% Life acquisition and administration costs 542.4 574.9 574.4 Expense ratio (b) 10.2% 11.1% 10.4% Non life business Total net premiums 3,332.8 3,293.0 3,232.4 Non-life gross premiums 4,211.2 4,013.8 3,927.9 Increase on equivalent terms (a) 5.2% 2.0% 1.1% Non-life gross premiums from direct business 3,342.7 3,279.3 3,246.4 Increase on equivalent terms (a) 2.1% 0.7% -0.4% Non-life gross premiums from indirect business 868.5 734.5 681.5 Increase on equivalent terms (a) 19.0% 7.9% 12.8% Non-life acquisition and administration costs 706.1 702.6 698.7 Expense ratio (b) 21.2% 21.4% 21.7% Non-life loss ratio (c) 72.9% 73.8% 77.5% Non-life net combined ratio (d) 94.1% 95.2% 99.2% Current financial result 2,394.7 1,604.4 2,504.4 (continues) 12 (continues) 2012 2011 2010 (in million euro) Financial Statement Financial Statement Financial Statement Technical provisions 41,784.9 41,718.5 40,689.1 Technical provisions life 35,025.9 34,921.3 33,898.0 Technical provisions non life 6,759.0 6,797.2 6,791.1 Investments 65,895.8 64,443.5 64,505.2 Capital and reserves 14,274.8 14,259.5 14,324.8 (a) At equivalent exchange rates. (b) Acquisition and administration costs on total premiums. (c) Claims, maturities and surrenders on earned premiums. (d) Sum of (b) and (c). BUSINESS ENVIRONMENT Macro-economic scenario The just ended year was marked by a weak macro- Despite reducing financial turbulence, the economy of economic situation, although there were some positive the European Union is struggling to grow, given the signs in the second half of the year characterized by a particularly weak internal demand due, in large part, to more sustained economic growth in the United States the effects of austerity policies aimed at reducing the and a significant reduction in volatility in the European public deficit. The data from the third quarter underline stock markets. a worsening economic situation with a GDP that is expected to be around -0.4% for all 27 countries in the In the Euro Zone, BCE measures were determinant, Union and this drops another -0.6% for all countries in which were proven to be efficient in significantly the Euro Zone. Unemployment in the Euro Zone in the reducing the spread between the bund and government last quarter of the year remained stable at 11.7% while bonds in Euro Zone Countries with a high level of debt, the tendential inflation rate in the Euro Area dropped to particularly Italy and Spain. During 2012, the Central 2.0% in January 2013 compared to 2.2% at the end of Bank actually granted loans to European Banks through 2012. LTRO (long term refinancing operation) operations, implementing quantitative easing (purchasing In the European Union, Italy is among the countries government debt) at the same time and, subsequently where economic activity has slowed down significant drafted a plan (called Outright Market Transactions – (the GDP changed -2.7% in the fourth quarter of 2012) OMT) to support those Countries whose sovereign bond due to a decline in internal demand and the measures returns do not seem justified by the basic undertaken by the government, which however macroeconomic indicators. contributed to the stability of the public accounts in the country. Germany continued to be the economic driver At the same time, in the political contest, the framework of the European Union, even though it experienced for a European banking union was developed, which will some slow down compared to the previous fiscal year be monitored by the BCE. Two important measures were (+0.9% increase in GDP in the third quarter compared approved, the so-called fiscal compact, aimed at to +2.7% last year), particularly due to weak foreign strengthening the Stability Agreement (limiting the demand.