GROSS WRITTEN PREMIUMS AND NEW BUSINESS DEVELOPMENT

Gross written premiums

Written premiums in the life segment, including premiums related to investment contracts, amounted to € 53.297 million, a 6.2% increase over the previous year.

In accordance with the strategy to optimize performance of the life insurance business, favouring products with low capital absorption, the unit/index linked contracts are up by 8.6% and the protection contracts are up 11.8%. The savings policies also contributed to that performance (+3.7%).

Net inflows were also positive, and amounted to € 14,920 million. The significant increase over the previous year (+15.5%) reflects improvements in the premium income, especially in Italy, France and the Eastern European countries, in addition to the excellent results in Asia where net inflows more than quadrupled.

These trends were only partly offset by the drop observed in EMEA as a result of the planned reduction of single premiums in Ireland and the slight increase in total capital outflow.

New business stood at € 5,210 million (-0.2% on equivalent exchange rates and portion attributable to the Group) in terms of annual premium equivalents (APE).

Trends in single premiums were positive (+8.3%), especially in Italy, France and Asia, while the annual premiums fell (-6.8%) mainly following the drop in Italy which was only partially offset by the growth in France and Asia.

With reference to the lines of business, there was a significant increase in unit/index linked business (+14.6%) which was concentrated in the main areas (+45.7% in Italy, due to the strong growth in the “multi-line” products, and in France and Germany) and in business risk (+22.4%). Savings policies were down (-9.8%).

Despite the strong recovery in the second half of the year thanks to the improvement in the financial situation, the adverse economic environment weighed on the profitability levels of new business (margins on the APEs) due to the reduction in interest rates and the strong increase in volatility during the year. This is why profitability amounted to 21.0% (24.0% as at 31 December 2015), which was stable in any case, due in part to the planned recalibration of the level of guarantees and their weight on the APEs (from 72.5% to 66.5%). New business value (NBV) stood at € 1,097 million (-13.0% on a like for like basis).

There was a significant increase in gross written premiums in Italy (+11.5%), growing from € 17,393 million at 31 December 2014 to € 19,400 . This was due to the 12.5% increase in individual inflows, especially the individual single premiums (+19.1%). Income performance in the individual single retail premiums was helped by the competitive returns compared to alternative products and was driven by the success of the hybrid products.
The growth in premiums was shared across all the companies, with good performance from all the distribution channels. More specifically, the hybrid products business was shared across Genertel Life (+35%), Generali Italia (+93.8%) and Alleanza (+218%).
The new business in terms of APEs was down (-6.8%) following the fall in the annual premiums (25.2%) despite the progress in the single premiums (+17.7%) which represent the majority of the APEs (54.1%).
Profitability (margins on the APEs) fell slightly to 25.4% (25.7% at 31 December 2014) mainly following the adverse economic situation for the year, despite the increase in the weight of the more profitable unit/index linked products. Following the reduction in volumes and profitability, new business value fell by 8.0% and stood at € 589 million.
The improvement in the net inflows was decisive, and benefitted from the good performance of the premiums, while capital outflow stayed substantially stable; the slight increase in the surrender component was offset by the drop in those at maturity.
The gross written premiums in France increased from € 8,438 million as at 31 December 2014 to € 8,787 million, benefitting from low interest rates in France which drove many savers to alternative forms of savings investment, including those offered by the insurance sector, especially in the form of unit-linked products. The unit-linked products increased by 34.2%, and the pure risk policies also increased (+4%), mainly from the Small and Medium companies segment which benefitted from the new regulatory environment and the fact that the Group is a leader in this area. On the other hand, savings policies fell by 5% in line with the more restrictive subscription policies introduced by the Group.

The APEs w also up (+16%) thanks to the excellent progress in both annual premiums (+35.8%) and single pre miums (+4.6%). With reference to the lines of business, there was a significant increase in unit/index linked business (+41.7%), and in business risk (+46.1%).

The profitability (margins on the APEs) decreased from 10.9% in 2014 to 6.5% in 2015, mainly due to the adverse economic climate strongly reducing the profitability of the savings business, which represented 48.3% of the business. New business value amounted to € 62 million (-30.1%).

Net inflows, which had turned back to being positive the previous year thanks to the selective subscription policy and the proactive management of the existing portfolio, was up further, benefitting from the increase in premiums and reduction in capital outflows. 
The gross written premiums in Germany increased from € 13,675 million as at 31 December 2014 to € 14,146 million (+3.4%). This trend reflects the increase in the protection line (+14.0%) and the unit linked policies line (+9.2%).

New business in terms of APEs were down (-5.0%) due to the drop in both the life segment (5.0%) and the health line (-6.0%). In terms of business lines, there was an increase in the unit-linked policies (+18.5%) to the detriment of the savings business (-20.9%).

Profitability (margins on the APEs) decreased from 30.7% in 2014 to 23.1% in 2015, mainly due to the adverse economic climate which strongly reduced profitability, especially in the savings business where there is a high level of guarantee. New business value amounted to € 191 million (-28.7%).
Net inflows in Germany began to increase again after the drop the previous year which reflected the measures adopted to restructure the portfolio Tale trend riflette l’incremento osservato nella linea puro rischio e malattia (+14,0%) e nelle polizze unit linked (+9,2%).
The gross written premiums in Central and Eastern European countries increased from € 1,487 million as at 31 December 2014 to € 1.603 million (+7.4%). This trend reflects the significant developments in the single premium business, which has almost doubled, especially in Poland due to sales in the bank insurance channel.
On the other hand, business from annual premiums has fallen by 2.1% reflecting the trends in the Czech Republic.
With reference to the business lines, the protection lines are growing (+25.9%), as are the unit-linked policies (+15.0%); the savings line has decreased (-3.3%).
The drop in new business in terms of APEs (-3.2% on a like-for-like basis) is mainly due to the drop in the unitlinked business (-35.9% on a like-for-like basis).
The decline in profitability (margins on APEs) from 32.8% in 2014 to 23.7% in 2015 is explained both by the strong drop in the profitability of the risk business risk which represents 49.2% of the business.
The combined effect of lower sales volumes and declining profitability caused the new business value to fall by 30.2% on a like-for-like basis, standing at € 39 million.
Net inflows are strongly up (+38.4%); the previous year they had been strongly penalised by the higher outflows of pension funds and the increase in capital outflows.
The gross written premiums by the EMEA regional structure fell from € 6,919 million at 31 December 2014 to € 6.512 This trend was determined by the performance of the unit/index linked and savings business lines, only partially offset by the increase in the protection policies.
In particular, there was a reduction in gross written premiums in Spain, which amounted to € 958 million (€ 984 million at 31 December 2014). The increase in the protection policies (+7.4%) resulting from the numerous Techex initiatives and contribution by Cajamar was more than offset by the drop in the other business lines. More specifically, the savings policies (-5%) were affected by the lower transfers from pension plans and the fall in interest rates.
Gross written premiums in Austria stood at € 1,224 million, down by 5.4%. This performance reflects the effects of the planned strategic reduction of the single premiums (-23.5%), especially in the savings policies, which fell by 13.7% as a whole. On the other hand, the protection lines are growing (+14.6%), as are the unitlinked policies (+1.6%).
The gross written premiums for Switzerland were also down, standing at 1,236 million (-3.6% on a like-for-like basis) due to the reduction in both recurring premiums (-1.9%) and single premiums (-21.7%). With respect to the business lines, only the savings products showed growth (+4.7%), while the protection lines and the unitlinked lines fell by 1.3% and 6.8% respectively.
As noted above, income in Ireland fell from € 2,085 million to € 1,598 million due to the significant drop off in single premiums.

New business in terms of APEs was down (-7.2%), following the reductions in Ireland (-21.5%) and Guernsey (-22.0%), with direct effects on the unit-linked sector (-13.3%). On the other hand, there was good progress in Switzerland (+2.6%) and Belgium (+35.9%).

Overall, profitability rose from 25.9% in 2014 to 27.0% in 2015, mainly due to the strong increase in the risk business in Spain, despite the reduction in profitability in Switzerland following the adverse economic climate and the high level of guarantee offered. New business value amounted to € 174 million (-6.4%).

Net inflows for the EMEA regional structure fell to € 1,444 million (€ 2,703 million at 31/12/2014) due to the above-mentioned reduction in premiums in Ireland and the performance in Austria, where the net inflows affected the strong increase in payments and the drop in premium income. The negative amount of net inflows in Spain is due to the type of life portfolio, mainly focused on annuity products and short-term investments. In any case, thanks to the actions taken, net inflows improved in 2015 compared to the previous year (+34.5%).

Gross written premiums in Latin America increased (22.2% ) amounting to € 312 million(€ 254 million at 31 December 2014).

This development is the result of the growth in the two main countries in the Region; Argentina increased by 31%, driven also by ongoing high inflation levels, and Brazil grew by 23%, mainly thanks to the Generali Employee Benefit sector.

Finally, net inflows in Latin America are increasing.

The gross written premiums in Asia showed excellent performances, increasing from € 1,049 million at 31 December 2014 to € 1.895 million (+56.2%), thanks to the gains made in all countries in the area. Growth was positive in all countries in the region, but driven in particular by China (+61% on a like-for-like basis), thanks to the especially positive performance of the single premium products of the savings products, distributed through the bancassurance channel. These channels definitely benefitted from the uncertainties that characterised the Asian financial markets in recent months.

The net inflows also showed particularly positive trends, standing at € 924 million compared to € 197 million at the end of 2014. Even in this case, there was growth in all countries in the Region, but it was especially driven by China, which benefitted from the above-mentionedhigher volumes of premiums.

With reference to Asia and Latin America, the new business in terms of APEs is strongly up (+71.2%) with good increases in both Asia (+74.5%) and Latin America (+36.9%). Overall, thanks to the higher profitability (from 11.8% in 2014 to 13.5% in 2015) and the increase in volumes, the value of new business stood at € 42 million, up (+88.6%).

The gross written premiums in the International Operations grouping were up, increasing from € 598 million at 31 December 2014 to € 642 million (+7.4%). This development is attributable to the favourable business of Generali Employee Benefits and the Assicurazioni Generali S.p.A. activities.

Finally, net inflows are slightly down (-3%) due to the increase in the capital outflows observed mainly in the foreign branches.