G Generali

By Deborah Ball

MILAN--Assicurazioni Generali SpA (G.MI) on Friday reported a fall in first-half net profit, as volatile markets and Europe's ultralow interests ate into the performance of Italy's largest insurer.

Generali posted a first-half net profit of 1.2 billion euros ($1.33 billion), down 10% on the same period last year. Operating profit dropped 11% at EUR2.5 billion. It recorded premiums of EUR37 billion, down 2.1% on the first half of last year, with a 3.5% drop in premiums in its life segment more than offsetting a 1.3% increase in its property and casualty business compared with the first six months of last year.

In a statement, Chief Executive Philippe Donnet, who took over in March, said he was encouraged by Generali's performance "despite the extremely negative market conditions." The insurer, Europe's third-largest, will continue to rebalance its business toward property and casualty, he said.

Generali, which in the midst of a strategy to cut costs and simplify the business in response to tough business conditions, said it will continue to provide a robust dividend to shareholders. The company has been returning gains to shareholders rather than pursuing acquisitions.

Generali's economic solvency ratio, a measure of capital solidity for insurers, stood at 188%, unchanged from the end of March.

In a conference call with journalists, Mr. Donnet said Generali would commit EUR200 million to Atlante, a government-orchestrated fund financed by Italian banks, pension funds and insurers to help resolve the problems in Italy's banking sector.

The board of Banca Monte dei Paschi di Siena SpA (BMPS.MI)--Italy's troubled, No. 3 lender--will examine a plan later Friday to unload as much as EUR10 billion of nonperforming loans to Atlante.

Write to Deborah Ball at deborah.ball@wsj.com

(END) Dow Jones Newswires

July 29, 2016 02:57 ET (06:57 GMT)

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