Generali reported net outflows of 190 million euros in its life business, as attractive yields on Italian government bonds prompted customers to switch from Life policies to BTP bonds, head of finance Cristiano Borean told a press briefing.

Borean said this was particularly true of customers who bought insurance products in bank branches and approached such products as an investment, rather than seeking actual insurance coverage.

"We saw this trend already in the last quarter of 2022, and it continued in the first quarter of 2023, but the banking channel accounts for less than 10% of the group's total life reserves," Borean said.

The Bank of Italy's latest Financial Stability Report last week said that redemptions in the life insurance sector amounted to 85% of premiums at the end of March, compared with 53% as of the end of December.

For insurers that rely on banks and financial advisers for their distribution, redemptions totalled 119% of premiums.

Overall Generali's life segment proved resilient, with operating profit growing 1% year-on-year.

In the first three months of 2023, adjusted net profit came in at 1.23 billion euros ($1.35 billion), up 49.7% year-on-year, while operating profit, most closely watched by the market, grew 22.1% to 1.82 billion euros.

Effective from this quarter, Generali started reporting adjusted net profit to better reflect the underlying business dynamics, it said in a statement.

Generali maintained a solid capital position with a solvency ratio of 227% at the end of March from 221% at the end of 2022. It rose to 228% as of May 19, Borean said.

($1 = 0.9084 euros)

(Reporting by Gianluca Semeraro; Editing by Federico Maccioni, Shailesh Kuber and Emelia Sithole-Matarise)