Generali’s first quarter net profit plunged 84.8% to €113 million (US$124 million) from €744 million (US$815.5 million) reported in Q1 2019, as a result of the impact of the COVID-19 pandemic on financial markets.
The hit to its Q1 net profit was attributed to €655 million ($718 million) in net impairments on investments as well as the contribution of €100 million (US$109.6 million) the company made when it launched the Extraordinary International Fund in response to the pandemic crisis.
Generali’s Q1 consolidated operating earnings rose 7.6% to €1.45 billion ($1.59 billion), from €1.35 billion (US$1.48 billion) reported during Q1 2019.
The insurer’s property and casualty underwriting performance improved during the quarter, with a combined ratio of 89.5%, down from the 91.5% reported during Q1 2019. (Combined ratios below 100% indicate an underwriting profit).
The group’s total gross written premiums reached €19.2 billion (US$21.1 billion) , a slight increase of 0.3% from Q1 2019, thanks to the growth in the P&C segment which offset the decline in the Life segment.
The group’s preliminary solvency ratio dropped by 28 percentage points to 196% from 224% reported during the same period last year.
As for the year ahead, Generali expects its operating result to remain resilient in 2020 as a result of its business mix and diversification. However, it predicted that the weakness of financial markets and the consequences of the pandemic will adversely affect its 2020 net result, mostly due to impairments.
With regards to COVID-19 claims, Generali said it is still difficult to provide precise guidance on the impact of the crisis.
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