Generali beats estimates but non-life business fails to impress

MILAN (Reuters) -Generali reported on Tuesday first-quarter premiums and net profit that beat analysts' estimates as the life segment returned to positive net flows but the non-life business failed to impress investors, sending its shares down.

The Italian insurer's quarterly adjusted net profit of 1.12 billion euros ($1.22 billion) beat the 979-million-euro analyst consensus provided by the company. It was down 9% year-on-year because of an one-off capital gain related to the sale of a property development booked last year, Generali said.

The closely-watched operating profit rose 5.5% to 1.9 billion euros, broadly in line with expectations.

J.P. Morgan analysts said that while the figure was 1% below their estimates the group showed "strong relative performance" overall.

However, Generali shares, which have gained 21% so far this year, were down 3%, underperforming the Italian blue-chip index and the European insurance index. Some analysts pointed to lower-than-expected profitability in the property and casualty business as a reason for disappointment.

Group premiums rose 21.4% to 26.4 billion euros, ahead of the 23 billion euro consensus, as the life segment recorded net inflows of 2.3 billion euros, which Generali credited mainly to a strong improvement in savings and pension products.

The undiscounted combined ratio of the property and casualty, a measure of underwriting performance in which a level below 100 indicates a profit, improved to 93.7%. However, Jefferies analysts said the unchanged undiscounted loss ratio of 65.9% for the business, another measure of profitability, was "a minor disappointment."

The insurer's solvency ratio, a measure of its financial strength, was 215% at the end of March and rose to 217% as of May 15, the head of finance Cristiano Borean told reporters.

He said that Generali was well on track to achieve all its targets, including an annual growth rate in earnings per share between 6% and 8% in 2022-2024 and cumulative dividends up to 5.6 billion euros.

($1 = 0.9211 euros)

(Reporting by Gianluca Semeraro; Editing by Cristina Carlevaro, Tom Hogue, Emelia Sithole-Matarise and Tomasz Janowski)