Operating result

Operating result

The operating result for the property&casualty segment increased to € 1,987 million (€ 1,831 million at 31 December 2014). This significant increase (+8.5%) is mainly attributable to the technical result, with a Group Net COR of 93.1%, improving by 0.6 pps compared to the previous year.

With reference to the fourth quarter of the current year, compared to the same period of the previous year, the operating result increased by +27.3%, due to the positive technical result in the fourth quarter.

The operating return on investments of the property&- casualty segment increased to 5.09% (4.69% at 31 December 2014).

Technical result

Property&Casualty operating result: technical result

(€ million)31/12/201531/12/2014FOURTH
Technical result 1,213  1,082  233  205 
Net earned premiums 19,818  19,622  4,997  4,927 
 Net insurance benefits and claims -13,053  -13,084  -3,327  -3,294 
 Net acquistion and administration costs -5,404  -5,312  -1,399  -1,375 
Other net technical income -148  -144  -39  -53 

The technical result amounted to € 1,213 million, showing strong growth with respect to 31 December 2014 (+12.2%); this result includes the impact of catastrophic claims of approximately € 313 million, mainly resulting from the storms that hit Italy in March and April, and Central Europe at the beginning of July, in addition to flooding in the South of France in October. Similar events had an impact of approximately € 238 million at 31 December 2014.

Technical indicators

 Combined ratio   93.1%  93.8%  -0.6 
 Loss ratio  65.9%  66.7%  -0.8 
  current year loss ratio excluding natural catastrophes 68.9%  69.3%  -0.4 
  natural catastrophes impact 1.6%  1.2%  0.4 
  prior year loss ratio -4.6%  -3.8%  -0.8 
 Expense ratio   27.3%  27.1%  0.2 
   Acquisition cost ratio   21.3%  21.2%  0.2 
   Administration cost ratio   5.9%  5.9%  0.0 

The Group combined ratio improved to 93.1% (-0.6 pps compared to 31 December 2014), due entirely to the drop in the loss ratio (-0.8 pps); the expense ratio is slightly up at 27.3% (27.1% at 31/12/2014).

With respect the loss ratio, the improvement is due to both the current year loss ratio excluding natural catastrophes, down by 0.4 pps, which stood at -4.6 pps for previous years, taking the standard prudent approach of the Group. The percentage catastrophic claims at the end of 2015 were 1.6 pps, up by 0.4 pps compared to the
previous year. The reserving ratio was stable at 154%.

Acquisition and administration costs related to the insurance business stood at € 5,404 million, up compared to 31 December 2014 (€ 5,312 million). More specifically, the acquisition costs were up to € 4,229 million (+1.7%) due to the trends observed in the Central and Eastern European countries, Italy and Switzerland. The ratio of acquisition costs to net earned premiums therefore increased to 21.3% (21.2% at 31/12/2014).

Administration costs are also slightly up, amounting to € 1,175 million (€ 1,155 million at 31/12/2014); the ratio of costs to net earned premiums was however stable at 5.9%.

Therefore, the expense ratio stood at 27.3% (27.1% at 31/12/2014).

A review of the combined ratio for the business areas of the Group will follow.

ItalyItaly confirmed its excellent technical performance with a COR of 89.1% (-0.2 pps). This trend mainly reflected the decrease in the loss ratio (−0.5% pps) which benefited from the positive trend of non-catastrophic events. There was an increase in the percentage of catastrophic claims, amounting to € 120 million (corresponding to 2.1 pps on the net COR, up by 0.5 pps from the end of 2014) due to the storms at the beginning of March and September and the floods in Northern Italy in September.

The expense ratio increased with respect to the previous year, amounting to 22.5%, following the increase in the acquisition costs.


The combined ratio for France showed a significant improvement, going from 104.9% the previous year to 100.2%. This is entirely due to the reduction in the loss ratio standing at 72.6% (-4.6 pps), benefitting from the lower percentage of catastrophic claims, amounting to € 46 million (1.9 pps in 2015 compared to 2.4 pps at the end of 2014), but especially to improvement in the rate of non-catastrophic claims. In the previous year, this was affected by the strengthening of the reserves related to the Buildings and General lines in accordance with market trends. With reference to the business lines, the COR in the motor line was reduced in a significantly worse market, and in a situation where the Group managed to progressively recover its client base. The performance of the household multi-risk area was very positive in the retail sector. The expense ratio was substantially stable at 27.6% (-0.1%).


The German combined ratio also improved to 92.4%, which includes a 2.3 pps of catastrophic claims, mainly related to the June storms. Similar events had a 1.1 pps effect the previous year. On the other hand, non-catastrophic claims were down, as was the expense ratio, which stood at 27.9% (-0.4 pps).

Central Eastern Europe

The combined ratio for the Central and Eastern European countries stood at 90.1% (87.7% at 31/12/2014). This was mainly due to the increase in claims for both catastrophic claims, which had a 1 pps weight compared to the 0.4 pps weight of 2014, and for non-catastrophic claims. The improvement in the loss ratio in the non-motor line was offset by trends in the motor line, especially in Bulgaria and Poland which were affected by regulatory changes on reservations.

The expense ratio was slightly up, standing at 32.2%.


The combined ratio of the EMEA regional structure improved compared to 31 December 2014, standing at 95.2% (95.5% at the end of 2014), thanks also to trends in the main markets in the area.

The combined ratio for Austria was much improved (-0.8 pps), standing at 93.4% due to the fall to 66.1% in the loss ratio as a result of fewer big claims despite the higher percentage of catastrophic claims which amounted to 2.6 pps. (0.8 pps at year end 2014). The expense ratio was stable at 27.3%.

The Swiss combined ratio also improved to 0.6 pps, standing at 92.2%, reflecting the combined effect of the fall in claims and simultaneous increase in the expense ratio.

Finally, the combined ratio in Spain was substantially stable at 93.2% (-0.1pps).


While still at a high level, the Latin American combined ratio, of 106.1%, was down by 7.2 pps compared to the end of 2014. There was a positive performance in Argentina, while Brazil was partly affected by the negative performance of 2014 carried forward into the next year, along with a drop in income.

Investment result

Property&Casualty operating result: investment result

(€ million) 31/12/2015   31/12/2014  FOURTH QUARTER 2015  FOURTH QUARTER 2014  
Investment result1,0151,007247218
Current income from investments1,3141,358318300
 Other operating net financial expenses -298-352-71-83

The investment result in the P&C segment amounted to € 1,015 million, increased compared to 31 December 2014 (+0.8%). In particular the current income from investments amounted to € 1,314 million (€ 1,358 million at 31 December 2014); this decrease is mainly attributable to the difficult context of low reinvestment rates. However,
the actions by the Group aiming at sustaining the result have allowed the achievement of a current return of 3.2% (3.5% at 31/12/2014).

In detail, the change in current income is primarily attributable to the decline in income from equity instruments that fell from € 121 million at 31 December 2014 to € 96 million.

Current income from real estate investments - net of depreciation - was also decreased, amounting to € 256 million (€ 268 million at 31 December 2014).

Despite the low reinvestment rates, income from investments in fixed income securities was stable, in line with the previous year, decreasing from € 861 million at 31 December 2014 to € 856 million.

Other operating net financial expenses, which includes interest expense related to operating debt and investment management expenses amounted to € -298 million (€ -352 million at 31 December 2014) due to lower investment property management costs.

operating result: other operating items

Other operating items of the property&casualty segment, which primarily include non-insurance operating expenses, depreciation and amortization of tangible
assets and multi-annual costs, provisions for recurring risks and other taxes, decreased to € -242 million (€ -258 million at 31 December 2014) mainly due to lower provisions for risks.