In 2019, current economic growth trends are expected to slow on the whole. In the Eurozone, GDP growth is expected to decline to 1.0%, from 1.9% in 2018. In any event, some critical situations may significantly impact this trend: Brexit, renewed tensions concerning the Italian government spread, trade relations between the USA and China and USA tariffs on European cars. In this context, we expect the European Central Bank to closely monitor inflation to decide when to implement the first rate hike, which may take place not earlier than mid-2020.
In the United States, a slowdown is expected in the current phase of expansion, due to the more restrictive monetary policy and the elimination of tax stimulus measures. The job market, at full employment, will continue to support wage growth. The Federal Reserve indicated that it intends to normalise monetary policy toward a less aggressive stance; a wait-and-see approach associated with the future trend of economic indicators will prevail, and consequently less predictable.
In the financial markets, long-term rates are expected to rise in the bond segment. Considerable volatility is expected in the stock markets this year due to the reduction in monetary stimulus, higher bond yields, expectations of lower economic growth and the various external risks negatively affecting the political and economic scenario.

As regards the insurance sector, in 2019 performance in the Life segment is expected to be slightly worse than in 2018, with a lower growth rate in unit-linked products than witnessed in recent years, while traditional products could arouse renewed interest due to the rate hike. Growth in the P&C segment will continue in major Eurozone countries despite the slight economic slowdown forecast.
Again in 2018 the international insurance market recorded a certain frequency of considerable natural catastrophe claims which concerned the reinsurance segment to a significant extent, particularly in the second half of the year: hurricanes in the USA-Caribbean area, typhoons in Asia and the devastating forest fires in California. The reinsurance segment demonstrated its ability to absorb this new wave of claims, recording, although selectively and linked to the results achieved, growth in the retrocession market. The Group was able to benefit from favourable conditions due to its centralized reinsurance structure which allows for greater control over risk retention levels and good diversification in reinsurer portfolios. There were minimal increases or there will be in 2019 only on agreements with a higher claims frequency, as well as a higher corporate risk reinsurance cost, although against broader coverage aimed at better controlling result volatility.

In the Life segment, the Group will continue with its strategy of rebalancing that portfolio to further strengthen profitability, with a more efficient capital allocation approach. The Generali brand continues to be consolidated by simplifying and innovating the range of product solutions which will be marketed through the most suitable, efficient and modern distribution channels that are increasingly based on digital processes. As a result, actions dedicated to Life portfolio enhancement are confirmed:

  • new business growth based on the selective development of sustainable business lines such as protection and health, and on capital-light savings and investment insurance solutions. The development of these lines will aim at offering a wide range of insurance solutions adapted to risk and investment profiles for the benefit of both the policyholders and the Group. In particular, for products in the protection and health line, we aim to offer modular solutions in which traditional risk coverage is combined with substantial service packages for an even more concrete management and resolution of the critical issues covered. Amongst the capital-light products, unit-linked target products are increasingly characterized by financial mechanisms that are capable of coping with potential market crashes (e.g. selection of volatility-controlled funds); 
  • with regard to in-force business, actions dedicated to strengthening relations with existing customers on the basis of an updated analysis of current insurance needs; 
  • actions on the Life portfolio in general, which will have a new important focus on senior customers, a market segment with substantial development potential.

The Group will follow up on the positive results of the rebalancing of the business mix while emphasizing the focus on market positioning in terms of premiums. Premium trends will continue to reflect a careful underwriting policy, in line with the common Group goals that are driven by a focus on the central importance of customers’ interest, as well as the value of the products and the risk appetite framework.

In the P&C segment, premiums are forecasted to improve in the primary geographical areas of operation of the Generali Group, with a significant focus on high growth potential markets.
The motor business will basically remain stable, although impacted by strong competitive pressure due to the digital transformation, with possible impacts from the business perspective on both volumes and profits. The Generali’s aim is to continue to develop innovative insurance solutions while maintaining its leadership in the telematics market and guaranteeing growth in this business line’s profitability.

In line with the profitable growth and customer centricity set in the strategy, non-motor development will concentrate on modular products designed to meet specific needs and any new customer needs, providing innovative services, prevention and assistance with the support of digital tools and platforms. Growth in this segment will also be supported by taking advantage of the opportunities offered by new markets and moving forward with distribution channel and partnership initiatives.
To handle these changes, the Group has rolled out a number of initiatives to exploit the opportunities offered by new technologies, for claims settlement as well as time to market. These initiatives will continue to work alongside a disciplined portfolio management approach - pricing, selection and profitability of risks - and careful assessments of customer requirements, which are placed at the very centre of product development, so as to create products that also take advantage of cross-selling opportunities.
As in the past, management of the P&C segment - due to the level of capital absorption of these products - will therefore continue to be a foundational principle for implementing the Group’s strategy whose objective is to become the leader in the European insurance market for private individuals, professionals and SMEs.

In the Asset Management segment, actions will continue during 2019 to identify investment opportunities and sources of income for all customers, while at the same time managing risks. Consistent with the Group’s strategy, growth will be achieved through the expansion of the multi-boutique platform in order to increase the product catalogue in terms of real assets and high conviction strategies for customers and partners. This platform, which is at present mainly based in Europe, aims to become global with the increase in revenues and assets under management (AUM) that will result from third-party customers that do not fall within the scope of the Group’s insurance policies.

The Group investments policy will continue to be based on an asset allocation strategy aimed at consolidating current returns and ensuring consistency with liabilities to the policyholders.
The fixed-income investment strategy aims to diversify the portfolio, both within the sector of government bonds as well as in terms of corporate bonds, in order to guarantee adequate profitability to policyholders as well as a satisfactory return on capital while maintaining a controlled risk profile.
Alternative investments and investments in real assets are considered appealing due to their contribution to portfolio diversification and profitability. The Group is developing a multi-boutique insurance asset manager platform to enhance the investment capacity in these market sectors and better monitor their management in terms of complexity as well as liquidity.
The increase in exposure to alternative investments will be offset by reduced exposure to corporate bonds. New direct investments in the real estate sector will be primarily oriented towards the European market, while investments in the United States and Asia will be made selectively through funds.

Despite a rather challenging market context, the Group achieved the targets established in the 2016-2018 strategic plan, highlighting solid profitability, focused on the technical component and on cost efficiency, and offsetting the effects of low interest rates. On 21 November 2018, the Group presented to investors the new 2021 Generali strategy, whose priority is to consolidate its leadership in Europe and strengthen its position in high-potential markets, financial optimisation, and innovation and the digital transformation of the operating model. Thanks to these initiatives, the Group is committed to achieving an increase in earnings per share of between 6% and 8% over the next three years and to offer greater returns to shareholders with an average RoE of more than 11.5% and a pay-out ratio between 55% and 65%.


The Report contains statements concerning events, estimates, forecasts and future expectations based on the current knowledge of the Group’s management. Such statements are generally preceded by expressions such as “a decrease/increase is expected”, “is forecast”, “should grow”, “we believe it may decline” or other similar wording. Please note that these forward-looking statements should not be considered forecasts of the Group’s actual results or of factors outside the Group. Generali assumes no obligation to update or revise such forecasts, even after new information, future events or other elements come to light, unless required by law.