Generali beats profit estimates despite natural disasters

(Reuters) — Generali beat nine-month profit forecasts as lower claims and price increases offset a 930 million euro ($982 million) hit from natural disasters, the Italian insurer said Friday.

Nine-month operating profit rose 7.9% to €5.4 billion ($5.7 billion), above a company-provided analyst consensus estimate of €5.15 billion.

Adjusted net profit came in at €2.9 billion, above the consensus of €2.75 billion but down 3.3% year-over-year due to a positive capital gain recorded in 2023.

Operating profit at Generali’s nonlife business, which in previous quarters was dragged down by the impact of natural catastrophes, rose 2.5% to €2.21 billion, above the consensus of €2.1 billion.

“The main driver was a combination of the price increases implemented in the past” and a better quality of portfolio, finance chief Cristiano Borean told a post-results briefing.

“In addition we had a little bit less of what we call man-made claims, which are not related to catastrophes,” he added.

European insurers are facing escalating challenges as climate change intensifies, with more frequent and severe natural disasters such as floods and wildfires.

Mr. Borean estimated a further €100 million euros impact from natural disasters in October and November.

Generali’s solvency ratio, a measure of financial strength, fell to 209%, from 220% a year earlier, because of the acquisition of Liberty Seguros in January, regulatory changes, market and noneconomic variances, the company said in a statement.

The ratio has declined slightly since the end of September, Mr. Borean said without elaborating.

Generali, which will unveil a new strategy on Jan. 30, is on track to meet all its targets this year, Mr. Borean said.