(Reuters) — Italy’s top insurer Assicurazioni Generali said on Tuesday it would raise rates to keep pace with rising costs, and maintained its financial targets after strong life business helped it beat first-half profit expectations.
Generali, which on Wednesday is launching its first share buyback in 15 years, reported first-half net profit of 1.4 billion euros ($1.4 billion), above a company-wide analyst consensus of 1.33 billion euros.
Net profit fell 9% year-on-year after a €138m write-down on the company’s exposure to Russia.
“Generali’s life business is the standout performer year-to-date… driving a material blow to earnings expectations,”; Jefferies analysts said.
Generali confirmed all targets under its 2022-2024 strategic plan, including average compound earnings per share growth of 6% to 8%.
Over the past year, the insurer has been hit by a boardroom battle in which two of its top three investors challenged the reappointment of CEO Philippe Donnet.
“The results showed that implementing our strategic plan is the right way to achieve sustainable growth and to increase our operational profitability” despite growing macroeconomic and geopolitical uncertainty, Donnet said at a press briefing.
Adjusted operating profit rose 4.8% from a year earlier to 3.14 billion euros, above a consensus forecast of 2.96 billion euros.
To counter the effects of rising inflation on claims costs, Generali will “significantly” raise prices in non-life insurance, Donnet said.
As stated in its strategic plan, Generali will spend 500 million euros to buy back up to 3% of its share capital by the end of this year.