G Generali

By Giovanni Legorano 

MILAN--Assicurazioni Generali SpA said Friday that it will lift its dividend for 2015 after reporting higher full-year net profit driven mainly by better results in its non-life business.

It plans to pay a dividend of EUR0.72 ($0.81) a share for 2015, up from EUR0.60 a year earlier.

Europe's No. 3 insurer by premiums said net profit almost quadrupled to EUR304 million in the fourth quarter, while over the full year it was up 22% at EUR2 billion.

The company launched a new strategic plan in May last year for the four years to 2018, hinging on a big commercial push in Europe, Asia and Latin America to improve cash flow, with gains to be returned to its shareholders through fatter dividends rather than being spent on acquisitions.

At the time it said the combination of new measures should generate cumulative net free cash flow of more than EUR7 billion between 2015 and 2018, equivalent to around EUR1.8 billion a year. Last year the company generated EUR1.2 billion in cash.

Late Thursday the insurer said it has appointed the head of its Italian division, Philippe Donnet, as new chief executive, and chief financial officer Alberto Minali as general manager, confirming an earlier report by The Wall Street Journal. The new executives will retain their current roles.

Mr. Donnet succeeds Mario Greco, who quit earlier this year to head Zurich Insurance Group AG's after almost four years at the helm.

He takes over at a time when financial market conditions make it more difficult for insurers to generate attractive returns.

Europe's insurers and banks are grappling with tougher regulations and low or negative interest rates in much of the region. Those factors are putting pressure on finances and squeezing profit margins amid volatile markets, with investors jittery about the prospects for global economic growth.

"We have been appointed to implement the strategic plan. In its implementation we will adapt to the conditions of the insurance and financial markets," Mr. Donnet said when asked whether in the future there could be changes to the insurer's four-year strategy.

Generali said its operating result for the year rose 6% to EUR4.79 billion, helped mainly by its non-life business, where income grew by 9% from the previous year.

Mr. Minali said the company took an EUR88 million impairment in the fourth quarter on its BTG Pactual stake but that part of that write-down had already been recovered, the full effect of which should be seen in the second quarter of this year.

He also said that market turbulence over the fourth quarter forced the insurer to write down some stocks it holds in its portfolio, further reducing its net profit for the period.

Generali's capital position also improved over last year to an economic solvency ratio of 202%--a measure of an insurer's financial solidity calculated with an internal model--compared with 186% at the end of 2014.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

(END) Dow Jones Newswires

March 18, 2016 04:38 ET (08:38 GMT)

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