International horizons: every destination has its starting point Management Report and Parent Company Financial Statements 2012 181st year of activity A complete vision, attention to details Trieste, Piazza Unità d’Italia. This is where our journey began, a journey that established Assicurazioni Generali as a strong an admired insurer in and outside Italy. Our all-round vision gives us a global understanding of the world in which we work, but with close attention to details: Management Report and Parent Company Financial Statements 2012 Management Report and Consolidated Financial Statements 2012 Corporate Governance and Share Ownership Report 2012 Remuneration Report 2012 A complete vision, attention to details this is how we create synergy between financial and social responsibility, and build value for each individual stakeholder. This report illustrates the results of our vision for our shareholders, clients, agents, employees, society and the financial community: results that enable us to continue to look far ahead. Management Report and Parent Company Financial Statements 2012 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 Ornella Barra, DIRECTORS Alberta Figari, Lorenzo Pellicioli, Sabrina Pucci, Clemente Rebecchini, Paola Sapienza, Paolo Scaroni 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 30 APRIL 2013 www.generali.com CTSONTAC 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 Report Head: Giulio Benedetti Tel. +39 040 671060 [email protected] Head: Marina Donati INDEX MANAGEMENT REPORT ATTESTATION OF THE FINANCIAL STATEMENTS Company highlights 12 PURSUANT TO THE PROVISIONS OF THE Business environment 13 ARTICLE 154-BIS OF legislative The Generali Group’s profile 17 DECREE 58 OF FEBRUary 24, 1998 AND Generali Group Strategy 17 CONSOB REGULATION 11971 Social and environmental commitment 20 OF MAY 14, 1999 327 Part A - Information on operations 22 Part B - Risk report 47 Appendix to the Report 57 BOARD OF AUDITORS’ REPORT 329 PARE NT COMPANY FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT AND Parent Company Balance sheet and ACTUARY’S REPORT 335 Profit and loss account Balance sheet 67 Profit and loss account 81 Notes to the Parent Company financial statements Foreword 93 Part A - Summary of significant accounting policies 93 Part B - Information on the balance sheet and the profit and loss account 98 Part C - Other information 159 Cash flow statement 165 Appendices to the notes 173 Statement relating to the solvency margin 259 Securities and urban real estate on which revaluation have been carried out 263 Companies in which an unquoted shareholding (which is higher than 10%) is held 271 RELAZIONE SULLA GESTIONE Madrid - Spagna ManageMenT rePorT Madrid - Spain CompaNY HIGHLIGHTS (in million euro) 2012 2011 2010 FINANCIAL StatemeNT FINANCIAL StatemeNT FINANCIAL StatemeNT Net profits 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 1,277.4 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 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). 12 | Assicurazioni Generali - Management Report and Parent Company Financial Statements 2012 BUSINESS ENVIRONMENT (buying back restricted debt), implemented by Greece, which was able to obtain a new tranche of assistance. Despite reducing financial turbulence, the economy of the Macro-economic scenario European Union is struggling to grow, given the particularly The just ended year was marked by a weak macro- weak internal demand due, in large part, to the effects of economic situation, although there were some positive austerity policies aimed at reducing the public deficit. The signs in the second half of the year characterized by a data from the third quarter underline a worsening economic more sustained economic growth in the United States and situation with a GDP that is expected to be around -0.4% a significant reduction in volatility in the European stock for all 27 countries in the Union and this drops another markets. -0.6% for all countries in the Euro Zone. Unemployment in the Euro Zone in the last quarter of the year remained stable In the Euro Zone, BCE measures were determinant, at 11.7% while the tendential inflation rate in the Euro Area which were proven to be efficient in significantly reducing dropped to 2.0% in January 2013 compared to 2.2% at the the spread between the bund and government bonds in end of 2012. Euro Zone Countries with a high level of debt, particularly Italy and Spain. During 2012, the Central Bank actually In the European Union, Italy is among the countries where granted loans to European Banks through LTRO (long economic activity has slowed down significant (the GDP term refinancing operation) operations, implementing changed -2.7% in the fourth quarter of 2012) due to a quantitative easing (purchasing government debt) at the decline in internal demand and the measures undertaken same time and, subsequently drafted a plan (called Outright by the government, which however contributed to the Market Transactions – OMT) to support those Countries stability of the public accounts in the country. Germany whose sovereign bond returns do not seem justified by the continued to be the economic driver of the European Union, basic macroeconomic indicators. even though it experienced some slow down compared to the previous fiscal year (+0.9% increase in GDP in the third At the same time, in the political contest, the framework quarter compared to +2.7% last year), particularly due to for a European banking union was developed, which weak foreign demand. will be monitored by the BCE. Two important measures were approved, the so-called fiscal compact, aimed at Encouraging signs of recovery came from the United States strengthening the Stability Agreement (limiting the deficit/ in the third quarter, where the GDP increased by +2.5%, GDP ratio at 0.5% and the repayment of public debt thanks, in particular, to the labour market and real estate exceed 60% of the GDP) and the ESM (European Stability market recovery. China continued to show sustained Mechanism), a mechanism aimed at assisting struggling growth rates (+7.8% increase in the GDP in 2012) even Euro Zone countries. Finally, a final important sign for the though this was a slow down compared to the previous stability of the Euro is the success of the buy-back operation fiscal year (+9.2%) due to a decline in global demand.