Generali : Financial Information as of 31 March 2023 – Press Release

25/05/2023

PRESS RELEASE

FINANCIAL INFORMATION AT 31 MARCH 20231

Generali delivers strong profitable growth and confirms its extremely solid capital position

• Gross written premiums increased to € 22.2 billion (+1.3%) driven by robust growth in P&C segment (+10.1%). Life net inflows were entirely focused on unit-linked and protection, consistent with the Group's strategy
• Operating result rose to € 1,820 million (+22.1%), mainly thanks to the strong contribution from the P&C segment, while the Life segment was resilient. The Combined Ratio improved to 90.7% (-5.6 p.p.). Excellent New Business Margin at 5.72% (+0.32 p.p.)
• Adjusted net result2 grew substantially to € 1,229 million (+49.7%), reflecting the benefit of diversified profit sources
• Extremely solid Solvency Ratio at 227% (221% FY 2022)

Generali Group CFO, Cristiano Borean, said: "The strong profitable growth delivered in the first quarter

confirms that we remain fully on-track to meet the targets of our 'Lifetime Partner 24: Driving Growth' strategy. The performance of the P&C segment reflects our focus on technical excellence, while in theLife segment we continue to rebalance our business mix towards our more profitable lines, even in a challenging environment. The Group also confirms its extremely solid solvency position, driven by strongorganic capital generation.

This quarter is also the first time that we report under the new accounting standards. This allows us to significantly improve the visibility and predictability of profit sources and provides a more accurate representation of the value embedded in our Life business. I would like to thank all the colleagues in theGroup that have contributed to the IFRS 17 and 9 project."

1. Starting from 1Q 2023 the bancassurance JVs of Cattolica (Vera and BCC companies) are considered a 'disposal group held for sale' under IFRS 5 and therefore their results are reclassified in the 'Result of discontinued operations'. Consequently, the Group results 1Q
   2022 presented last year have been restated. The result of discontinued operations amounted to € 27 million (€ 1 million 1Q 2022). Changes in premiums, Life net inflows and new business were presented on equivalent terms (at constant exchange rates and consolidation scope). Changes in the operating result, general account investments and Life insurance liabilities excluded any assets under disposal or disposed of during the same period of comparison. The amounts were rounded and may not add up to the rounded total in all cases. The percentages presented can be affected by the rounding.
2. Adjusted net result and EPS definitions include adjustments for 1) profit or loss on assets at fair value through profit or loss (FVTPL) on non-participating business and shareholders' funds, 2) hyperinflation effect under IAS 29, 3) amortisation of intangibles related to M&A, 4) impact of gains and losses from acquisitions and disposals.

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EXECUTIVE SUMMARY

Key Figures (1)

			31/03/2023		31/03/2022(2)	Change(3)
Gross Written Premiums (€ mln)		22,163		21,533	1.3%
Consolidated Operating Result (€ mln)		1,820		1,491	22.1%
Life Operating Result		924		915	1.0%
P&C Operating Result		847		485	74.6%
Asset & Wealth Management Operating Result		233		259	-10.0%
Holding and other businesses Operating Result		-117		-110	6.2%
Consolidation adjustments		-67		-58	15.6%
New Business Margin (% PVNBP)		5.72		5.39	0.32 p.p.
Combined Ratio (%)		90.7		96.3%	-5.6 p.p.
Adjusted Net Result(4) (€ mln)		1,229		821	49.7%
Net Result (€ mln)		1,199		481	n.m.
Adjusted EPS(4) (€)		0.80		0.52	53.5%
			31/03/2023		31/12/2022	Change
Group's shareholders' equity (€ mln)		28,026		27,064	3.6%
Contractual Service Margin (€ mln)		32,079		30,870	3.9%
Total Assets under Management (€ mln)		631,278		615,180	2.6%
Solvency II Ratio (%)		227%		221%	6 p.p.

1. The figures in this press release were presented under the new IFRS 17 and IFRS 9 accounting standards. Glossary is available at the end of this document.
2. 1Q 2022 Gross Written Premiums and Operating Result by segments have been restated following the IFRS5 application.
3. Please refer to note 1 on page 1.
4. Please refer to note 2 on page 1.

Milan - At a meeting chaired by Andrea Sironi, the Assicurazioni Generali Board of Directors approved the Financial Information at 31 March 20233 of the Generali Group.

The Group's gross written premiums increased by 1.3% to € 22,163 million thanks to the robust growth in the P&C segment. Life net inflows were € -190 million, with net outflows from savings that were partially compensated by positive net inflows in both unit-linked and protection. This is in line with the Group's strategy to reposition its portfolio and it also reflects the industry trends observed in the banking channels in Italy and France.

3 The Financial Information at 31 March 2023 is not an Interim Financial Report according to the IAS 34 principle.

Starting from 1Q 2023 the reported financial information by geographical area reflects the Group's managerial structure effective as of 1st September 2022 and consists of: Italy, France, DACH (including Germany, Austria, Switzerland), International region (including Central Eastern Europe, Mediterranean & Latin America and Asia), Asset & Wealth Management and Group holdings and other companies, which includes also Europ Assistance and Global Business Activities.

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The operating result increased to € 1,820 million (+22.1%), thanks primarily to the contribution from the P&C segment.

The Life operating result was solid at € 924 million (+1.0%) and the New Business Margin increased to 5.72% (+0.32 p.p.).

The operating result of the P&C segment increased to € 847 million (+74.6%). The Combined Ratio improved to 90.7% (-5.6 p.p.), driven by a lower loss ratio.

The operating result of the Asset & Wealth Management segment was € 233 million (-10.0%), with a strong improvement from Banca Generali. The Asset Management result was affected by a strong 1Q 2022 comparison basis.

The operating result of the Holding and other businesses segment was € -117 million (+6.2%).

As announced in December 2022, the Group has introduced a new definition of the adjusted net result to better reflect the underlying business dynamics, effective from the first quarter of 2023. The following elements are normalised: the volatility stemming from the mark to market of assets at Fair Value through Profit and Loss held in non-participating business and shareholders' funds, the application of hyper-inflation accounting under IAS 29, the amortisation of intangibles related to M&A transactions, as well as gains and losses from acquisitions and disposals.

The adjusted net result substantially increased to € 1,229 million (€ 821 million 1Q 2022). This was due primarily to the improved operating result, which benefitted from diversified profit sources, a non-recurring capital gain related to the disposal of a London real estate development (€ 193 million net of taxes), and it also reflects the impact from € 96 million in impairments on Russian fixed income instruments recorded during the first quarter of 2022.

The net result improved to € 1,199 million (€ 481 million 1Q 2022).

The Group's shareholders' equity increased to € 28.0 billion (+3.6% compared to FY 2022), thanks to the net result for the period.

The Contractual Service Margin (CSM), which is the balance sheet liability introduced by IFRS 17 and which consists of the deferred discounted future profits of the in-force business, amounted to € 32.1 billion (€ 30.9 billion FY 2022).

The Group's Total Assets Under Management increased to € 631.3 billion (+2.6% compared to FY 2022), reflecting the positive market effect across the main asset classes.

The Group confirmed its extremely solid capital position, with the Solvency Ratio at 227% (221% FY 2022). The 6 p.p. increase mainly reflected the strong contribution of the normalised capital generation, and also benefitted from positive impacts from market variances (driven by the narrowing of spreads on government bonds, the recovery of the equity market and the reduced volatilities). These contributions more than offset the impacts stemming from the dividend provision for the quarter and the share buyback linked to the Group's long-term incentive plan.

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LIFE SEGMENT

• Operating result stood at € 924 million (+1.0%)
• Excellent New Business Margin at 5.72% (+0.32 p.p.)
• New Business Value (NBV) was € 657 million (-10.5%)

Life Key Figures

euro mln		31/03/2023	31/03/2022	Change(1)
VOLUMES
Gross Written Premiums	13,238	13,690	-3.7%
Net inflows	-190	3,679	n.m.
PVNBP	11,486	13,613	-15.6%
PROFITABILITY
New Business Value	657	733	-10.5%
New Business Margin (% PVNBP)	5.72%	5.39%	0.32 p.p.
Life Contractual Service Margin	31,266	30,052	4.0%
Life Operating Result	924	915	1.0%

(1) Please refer to note 1 on page 1.

Gross written premiums in the Life Segment4 amounted to € 13,238 million (-3.7%). The unit-linked line was down (-17.4%), driven by Italy, Germany and France. The protection line confirmed its healthy growth trajectory (+6.4%), driven in particular by France and International. The savings line was down slightly (-1.2%), with positive trends in Germany and Asia offset by the dynamics seen in Italy and France.

Life Net inflows were € -190 million. The protection and unit-linked lines recorded positive net inflows, with protection inflows reaching € 1,333 million, led by Italy and International, and with the unit-linked line at € 1,449 million, demonstrating its resilience compared with the broader insurance market.

New business (expressed in terms of the present value of new business premiums - PVNBP) was € 11,486 million (-15.6%), reflecting the economic context and the interest rates evolution, which affected the new business production in all main areas. This effect was also amplified by the higher impact of discounting on future premiums. The trends were visible in the unit-linked and saving businesses (-27.0% and -14.9% respectively), while the protection line remained very resilient (+1.0%).

The New Business Margin on PVNBP stood at an excellent 5.72%, increasing by +0.32 p.p. compared to 1Q 2022. This reflected a marked improvement in the underlying new business profitability, thanks to the quality of the product mix and the increase of interest rates.

The trends recorded on the volumes side offset the higher profitability, resulting in a New Business Value (NBV) of € 657 million (-10.5%).

The Life Contractual Service Margin (Life CSM) increased during the quarter to € 31,266 million from

• 30,052 million at FY 2022. This was thanks to € 824 million Life New Business CSM and reflected the release of the Life CSM for € 743 million. The latter also represents the main driver (almost 80%) to the Life operating result, which stood at € 924 million (€ 915 million 1Q 2022).

4 Including premiums from investment contracts equal to € 479 million (€ 261 million 1Q 2022).

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P&C SEGMENT

• Premiums increased to € 8,925 million (+10.1%)
• Combined Ratio improved to 90.7% (-5.6 p.p.)
• Operating result rose to € 847 million (+74.6%)

P&C Key Figures

euro mln		31/03/2023	31/03/2022	Change(1)
VOLUMES
Gross Written Premiums	8,925	7,843	10.1%
PROFITABILITY
Combined Ratio (%)	90.7%	96.3%	-5.6 p.p.
Nat Cat impact (%)	0.1%	1.4%	-1.2 p.p.
P&C Operating Result	847	485	74.6%

1. Please refer to note 1 on page 1.

P&C gross written premiums grew to € 8,925 million (+10.1%) boosted by the performance of both business lines.

Non-motor improved strongly (+12.1%), achieving widespread growth across all main areas. Europ Assistance premiums grew by 55.7%, thanks to the continued volume expansion in the travel business.

The motor line rose by 9.2%, thanks to the positive dynamics seen in Italy, France, CEE and Argentina. Excluding the contribution from Argentina, a country impacted by hyperinflation, total motor line premiums increased by 4.8%.

The Combined Ratio was at 90.7% compared to 96.3% in the first quarter of 2022. This was the result of an improvement in the loss ratio to 60.6% (-7.2 p.p.), partly compensated by a higher expense ratio at 30.1% (+1.6 p.p.). The positive dynamics in the loss ratio benefitted from a benign natural catastrophe loss ratio of 0.1%, which is 1.2 p.p. lower than 1Q 2022, and from a higher discounting impact. The impact from large man-made claims increased by 0.7 p.p.. The positive contribution from prior year development stood at -2.0% which is 1.9 p.p. better than 1Q 2022, a quarter that was also affected by inflation-related reserves strengthening.

The undiscounted combined ratio - which excludes the discounting effect from claims reserved - improved to 93.8%, from 97.4% at 1Q 2022.

The operating insurance service result was € 669 million (€ 233 million in 1Q 2022) benefitting from € 223 million of discounting effect compared to € 70 million at 1Q 2022, leading to an undiscounted insurance service result of € 446 million. The investment result was € 178 million (-29.2%), reflecting higher finance expenses, primarily driven by the rise in interest rates during 2022.

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