Assicurazioni Generali S p A : Consolidated Results as of 30 June 2021 – Press Release

03/08/2021

PRESS RELEASE

GENERALI GROUP CONSOLIDATED RESULTS AS AT 30 JUNE 20211

Generali confirms the Group's excellent profitability, with strong growth in premiums, operating and net results. Extremely solid capital position

• Operating result rose to € 3 billion (+10.4%), thanks to the positive performance of the Life, Asset Management and Holding and other businesses segments. The excellent contribution from the P&C segment was confirmed
• Gross written premiums increased to € 38 billion (+5.5%), up in both the Life segment (+5.8%) and the P&C segment (+4.9%). Strong Life net inflows at € 6.3 billion (-8.6%)2. The New Business Margin was excellent, and at 4.67%, among the best in the sector (3.94% 1H20). The Combined Ratio was substantially stable at 89.7% (+0.2 p.p.)
• Strong growth in the net result which rose to € 1,540 million (€ 774 million 1H20)3
• Solvency Ratio was extremely solid at 231% (224% FY2020)
• The Group is fully on track to meet its targets for the year and successfully complete the 'Generali 2021' strategic plan

The Generali Group CEO, Philippe Donnet, stated: "Today's excellent results confirm that we are fully on track to successfully deliver the ambitious targets of the current 'Generali 2021' plan, even in this very challenging environment. The significant growth achieved in the first six months of the year strengthens Generali's position as the European leader, thanks to our operational excellence, the acceleration of ourdigital innovation and the quality of our distribution network. We will continue to forge ahead with an even stronger focus on our Lifetime Partner ambition, leveraging on the enthusiasm, passion and energy ofour 72,000 colleagues and 165,000 agents worldwide, and we look forward to presenting the new plan at the Investor Day on December 15th."

1. Changes in premiums, Life net inflows and new business premiums were presented in equivalent terms (at constant exchange rates and consolidation scope). The operating result, own investments and Life technical provisions excluded any assets disposed of during the same period of comparison.
2. In June 2020, Generali won the mandate in Italy for the management of two investment segments of Cometa, the National Supplementary Pension Fund for workers in the engineering industry, the installation of industrial plants and similar sectors and for employees in the goldsmith and silversmith sector. Excluding the effect of this pension fund, Life net inflows would have increased by 16.6%.
3. The adjusted net result - defined as the net result without the impact of gains and losses related to disposals - is equal to the net result of the period, which was not impacted by gains and losses related to disposals. The 1H20 adjusted net result amounted to € 957 million, which neutralised € 183 million resulting from the settlement agreement for the sale of BSI. In addition, excluding the one-off expense of the Extraordinary International Fund for Covid-19, the 1H20 adjusted net profit amounted to € 1,032 million.

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EXECUTIVE SUMMARY

Key Figures

	30/06/2021	30/06/2020	Change
Gross written premiums (€ mln)	38,093	36,478	5.5%
Consolidated operating result (€ mln)	2,996	2,714	10.4%
Life operating result	1,442	1,369	5.4%
P&C operating result	1,256	1,302	-3.6%
Asset Management operating result	306	219	39.6%
Holding and other businesses operating result	251	38	n.m.
Consolidation adjustments	-259	-215	20.6%
New Business Margin (% PVNBP)	4.67%	3.94%	0.73 p.p.
Combined Ratio (%)	89.7%	89.5%	0.2 p.p.
Net result (€ mln)	1,540	774	99.0%
Adjusted net result(*)	1,540	957	61.1%
Adjusted EPS(*) (€)	0.98	0.61	60.8%
	30/06/2021	31/12/2020	Change
Group's Shareholders' equity (€ mln)	28,412	30,029	-5.4%
Total Assets Under Management (€ mln) (**)	672,359	654,720	2.7%
Solvency II Ratio (%)	231%	224%	7 p.p.

(*)The adjusted net result did not include the impact of gains and losses related to disposals (zero in 1H21; € -183 million in 1H20 for the expense resulting from the settlement agreement for the BSI disposal, without which the adjusted net result in 1H20 amounted to € 957 million). Also excluding the one-off expense of the Extraordinary International Fund for Covid-19, in 1H20, the adjusted net result stood at € 1,032 million (+49.3%) and the adjusted net EPS at € 0.66 (+49.1%).

(**)The 2021 Half-Year Financial Report takes into account, from a managerial view, a more consistent representation of the third-party assets under management. The value of the comparative period was therefore restated, on which the relative change was calculated.

Milan - At a meeting chaired by Gabriele Galateri di Genola, the Assicurazioni Generali Board of Directors approved the 2021 Consolidated Half-Year Financial Report of the Generali Group, expressing its satisfaction for the excellent results achieved in a particularly challenging environment.

The operating result rose to € 2,996 million (+10.4%), benefitting from the positive performance of the Life, Asset Management and Holding and other businesses segments. The contribution of the P&C segment was excellent, despite the impact of several significant natural catastrophe claims in continental Europe. The Life and P&C segments confirmed excellent technical profitability, demonstrated by the New Business Margin at 4.67% (3.94% 1H20) and a substantially stable Combined Ratio at 89.7% (+0.2 p.p.). The operating result of the Asset Management segment reached € 306 million (+39.6%), mainly boosted by the rise in operating revenues, also supported by the increase in assets under management.

The non-operatingresult was € -496 million (€ -941 million 1H20). The significant improvement was thanks to the lower impairments on available for sale investments - which were particularly affected in 1H20 by the impact of the pandemic on financial markets - and the increase in the realised gains, mainly deriving from equities and € 67 million for a real estate transaction for the Libeskind Tower in CityLife, Milan. The first half of 2020 was also impacted by the impairment on goodwill related to the Life business in Switzerland for € 93

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million, the one-off expense of € 100 million4 for the Extraordinary International Fund for Covid-19 and further local initiatives for € 54 million to face the pandemic. The impact of interest expenses on financial debt further improved, as a result of the debt optimisation strategy.

The net result significantly increased to € 1,540 million (€ 774 million 1H20) driven by the operating result and the non-operating performance, mentioned above.

The gross written premiums increased to € 38,093 million (+5.5%), thanks to positive growth in both business segments.

Life net inflows were strong and stood at € 6.3 billion (-8.6%)5, the decrease was attributable to the savings and pension line, consistent with the Group's portfolio repositioning strategy. Both the protection (+10.3%) and unit-linked (+0.9%) lines recorded growth.

Life technical provisions grew to € 393.4 billion (+2.3%; +3.4% excluding the effect from the deconsolidation of a pension fund in central and eastern European countries).

The Group's Total Assets Under Management reached € 672.4 billion, up +2.7% from 31 December 20206.

The Group's shareholders' equity was € 28,412 million, -5.4% compared to 31 December 2020. The change was due to a € 1,014 million decrease in the AFS reserves, deriving mainly from the performance of government bonds and the deduction of the entire dividend approved for a total of € 2,315 million, of which € 1,591 million related to the 2020 dividend, paid on 26 May 20217.

The Group confirmed its excellent capital position with the Solvency Ratio at 231% (224% FY2020). The increase of 7 p.p. was mainly attributable to the excellent normalised capital generation, net of the dividend for the period, calculated on a pro rata basis from the previous year's dividend, and to market variances. These positive trends more than offset the impact of the regulatory changes at the beginning of the year, operating variances (in particular, re-risking) and M&A transactions.

In addition, the Board resolved to launch the preparatory activities of the procedure to define a possible slate of candidates for the Board renewal in 2022: said procedure will be submitted to the next meeting of the Board of Directors on 27 September.

1. This amount, net of taxes, was € 75 million.
2. Excluding the effect of the collective Life pension fund in Italy, Life net inflows would have increased by 16.6%.
3. The 2021 Half-Year Financial Report takes into account, from a managerial view, a more consistent representation of the third-party assets under management. The value of the comparative period was therefore restated, on which the relative change was calculated.
4. The second tranche, equal to € 0.46, will be payable as of 20 October 2021 and the shares will be traded ex-dividend as of 18 October 2021: such second tranche will be payable subject to the verification by the Board of Directors of the absence of impeding supervisory provisions or recommendations in force at that time.

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LIFE SEGMENT

• Gross written premiums grew to € 25,791 million (+5.8%) in particular thanks to the positive performance of the unit-linked and protection lines
• The New Business Margin was confirmed at an excellent level at 4.67% (3.94% 1H20) and the new business value (NBV) grew to € 1,145 million (+29.3%)
• The operating result rose to € 1,442 million (+5.4%)

Life Key Figures

euro mln	30/06/2021	30/06/2020	Change
VOLUMES
Gross written premiums	25,791	24,645	5.8%
Net inflows	6,306	7,005	-8.6%
PVNBP	24,516	22,521	8.9%
PROFITABILITY
Life operating result	1,442	1,369	5.4%
New Business Value	1,145	887	29.3%
New Business Margin (% PVNBP)	4.67%	3.94%	0.73 p.p.

Gross written premiums in the Life segment grew by 5.8% to € 25,791 million, mainly driven by growth in the unit-linked line (+8.1%), especially in France and to a lesser extent, Germany. The protection line improved by +4%, mainly in Asia and Italy. The savings and pension business also increased (+2%), above all in France. Excluding the written premiums of a collective Life pension fund in Italy, total Life gross written premiums would have increased by 12.7% and unit-linked premiums by 38.4%.

Life net inflows were € 6,306 million (-8.6%). The decrease is attributable to the savings and pension line, consistent with the Group's portfolio repositioning strategy. Excluding the collective Life pension fund in Italy, mentioned above, Life net inflows would have increased by 16.6%. Life technical provisions grew to € 393.4 billion (+2.3%). Adjusting for the effect from the deconsolidation of a pension fund in central and eastern European countries, growth in the Life technical provisions would have reached 3.4%.

New business in terms of PVNBP (Present value of new business premiums) rose to € 24,516 million (+8.9%; +23% excluding the collective Life pension fund in Italy, mentioned above).

Despite less favourable financial assumptions, the New Business Margin was confirmed among the best in the sector and reached 4.67% (+0.73 p.p.) thanks to the rebalancing of the business mix towards the more profitable lines of business and the continued improvement in the features of new products, particularly in Italy and France. Excluding the collective Life pension fund in Italy, mentioned above, the New Business Margin would have grown 0.46 p.p..

Positive trends in production and profitability enabled the new business value (NBV) to reach € 1,145 million (+29.3%; +36.4% excluding the collective Life pension fund in Italy, mentioned above).

The operating result rose to € 1,442 million (€ 1,369 million 1H20). The net investment result improved compared with 1H20, which was affected by the negative performance of financial markets and the acceleration of the provisions for guarantees to policyholders in Switzerland. The technical margin grew in the first half of the year (+7.5%), thanks to the development of unit-linked and protection products. Operating expenses increased in the acquisition component (+12%). The technical margin, net of expenses, returned to growth in the second quarter, after a decline in the first.

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The technical margin was estimated8 to be impacted by € -62 million as a result of the Covid-19 pandemic, in particular for higher claims in the protection line, mainly in ACEER, France, Italy, the Americas and Southern Europe.

P&C SEGMENT

• Premiums rose to € 12,301 million (+4.9%), supported by the development of the motor and non-motor lines
• The Combined Ratio was substantially stable at 89.7% (+0.2 p.p.)
• The operating result was € 1,256 million (-3.6%)

P&C Key Figures

euro mln	30/06/2021	30/06/2020	Change
VOLUMES
Gross written premiums, of which;	12,301	11,833	4.9%
Primary Motor	4,520	4,400	4.7%
Primary Non-Motor	7,273	6,957	4.9%
PROFITABILITY
Combined Ratio (%)	89.7%	89.5%	0.2 p.p.
Nat Cat impact (%)	2.0%	1.1%	0.9 p.p.
P&C operating result	1,256	1,302	-3.6%

Premiums in the P&C segment increased by 4.9%, on equivalent terms, to € 12,301 million, reflecting the positive development in both the motor line (+4.7%) and non-motor line (+4.9%).

The premiums of Europ Assistance returned to growth (+5.2%), which was mainly affected by the impact of Covid-19 on the travel insurance sector in 1H20.

Positive growth in the motor line was recorded across almost all countries in which the Group operates, in particular ACEER (+6.1%), Italy (+5.5%) and Argentina (+47.1%, also allowing for inflationary adjustments). The non-motor line grew by 4.9% with positive trends in the Group's main countries of operation.

The operating result confirmed its excellent contribution standing at € 1,256 million (-3.6%). The slight decrease was mainly due to the contraction of the investment result (-5.6%) reflecting lower current income, in light of the current environment for interest rates and the devaluation of the Argentinian Peso. The technical result also fell slightly (-1.5%).

The Combined Ratio was substantially stable at 89.7% (+0.2 p.p.), mainly reflecting the significant impact from natural catastrophe claims, which weighed 2.0 p.p. (1.1.p.p. 1H20). In particular, there were € 218 million of natural catastrophe claims (€ 118 million 1H20), including a storm in Spain in January, and subsequently, storms that affected central Europe in June. The improvement in the non-catastrophe current year loss ratio was essentially due to the minor impact from large man-made claims. The contribution from prior years increased slightly and stood at -3.3%. The expense ratio stood at 28.5% (+0.6 p.p.), growing especially in the acquisition component (+0.9 p.p.) which mainly reflected the evolution in the motor line, as a result of the growth in higher commission coverage, in particular in Italy, and the increase in expenses resulting from the development and support of business in ACEER.

The Group estimated9 its Combined Ratio excluding Covid-19 impacts to be 91.2%.

1. For more information on the methods used to determine the quantitative impacts, see the section 'Disclosure on the quantitative impacts of Covid-19 on the Group' in the Annual Integrated Report and Consolidated Financial Statements 2020.
2. For more information on the methods used to determine the quantitative impacts, see the section 'Disclosure on the quantitative impacts of Covid-19 on the Group' in the Annual Integrated Report and Consolidated Financial Statements 2020.

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