UnipolSai Assicurazioni: consolidated results approved first half 2022

• Consolidated net profit of €422m in line with the normalised1 figure of €424m at 30 June 2021
• Direct insurance income increased to €6.6bn (+1.2%)
• • Non-lifebusiness: €4.2bn (+5.8%) of which €2.0bn MV and €2.2bn Non-MV

Positive performance in all the lines of business of the ecosystems:

1. Mobility: €2.2bn (+1.9%)

1. Welfare: €825m (+13.6%)

• • 1. Property: €1.2bn (+8.3%)
  • Life business: €2.5bn (-5.7%)
• Combined ratio net of reinsurance at 94.1%
• Individual solvency ratio of 303%

• The result for the first half of 2021 excluded the effects of the agreement relating to settlement of the actions for liability taken against former directors and statutory auditors of Fondiaria-Sai and Milano Assicurazioni and those relating to the tax realignment of goodwill and property.

Bologna, 5 August 2022

The board of directors of UnipolSai Assicurazioni S.p.A., which met yesterday under the chairmanship of Carlo Cimbri, approved the consolidated results as at 30 June 2022.

The UnipolSai Group ended the first half of 2022 with a consolidated net profit of €422m, in line with the normalised1 result of €424m for the corresponding period of the previous year which had been positively affected by certain extraordinary items (on the other hand, the book value of the net profit amounted to €542m).

Direct insurance income, including reinsurance ceded, stood at €6,632m in the first half of 2022, up +1.2% on the figure of €6,552m recorded at 30 June 2021.

Direct income from the non-lifebusiness at 30 June 2022 amounted to €4,152m, a significant increase (+5.8%) over the figure of €3,923m as at 30 June 2021, with a positive performance in all the ecosystems in which the Group operates. Along with the other main Group companies, the insurance company UnipolSai contributed to this result, with non-life premiums of €3,390m (+2.5%). UniSalute collected premiums of €301m (+10.5%), Arca Assicurazioni reported premiums of €125m (+46.8%) while Linear reported total premiums of €99m (+5.4%).

The MV business was up by 1.1% over the previous period, recording premiums of €1,967m. Even though there was a progressive recovery in the frequency of claims in the Motor TPL division, in a strongly competitive environment, average premium values do not yet reflect the current scenario of a strong resumption of movement after the limitations imposed by the pandemic. On the other hand, the accessory insurance cover included in the vehicle comprehensive and collision division continues to expand.

The performance recorded in the non-MV business was highly positive, with premiums of €2,184m, and a 10.5% increase over the first half of 2021, with all the main divisions of the business and all sales channels of the Group having contributed to that result.

The bancassurance business in which Arca Assicurazioni (€125m; +46.8%) and Incontra (€93m; +85.7%) operate is showing strong growth. This model added value to Unipol's distinctive know how through the branches of the various banking partners where Group products are sold.

The combined ratio, net of reinsurance, as at 30 June 2022 amounted to 94.1% (91.1% direct business) compared to a figure of 92.6% recorded at 30 June 2021 (91.4% direct business). The loss ratio, net of reinsurance, stood at 65.6% (compared to 65.0% for the first half of 2021), while the expense ratio, net of reinsurance, stood at 28.4% (compared to 27.5% at 30 June 2021). Claims were affected, inter alia, by the recovery in the frequency of claims made in the Motor TPL division, which were still benefitting from the restrictions imposed on the movement of people in the first half of 2021. The performance in the other divisions is positive along with maintenance of the reserving of claims for previous financial periods indicated by significant savings on claims paid.

UnipolRental, the Group long-term rental company, ended the half-year period with a further significant increase in the contracts acquired (approximately 70,000 compared to approximately 60,000 at the end of 2021) thanks in part to the excellent sales results achieved by the UnipolSai agencies. The total number of vehicles registered in the first half of 2022 amounted to 11,857 compared to 7,241 for the same period of the previous year. Revenue amounted to €171.2m and the net profit amounted to €13.6m.

The pre-taxresult for the non-lifebusiness amounted to €505m compared to a normalised1 figure of €531m recorded in the first six months of 2021 (on the other hand, the book value amounted to €553m).

The Mobility Ecosystem reported income of €2,155m (+1.9%) and grew its position along the entire mobility life-cycle through UnipolRental and UnipolMove, the new electronic toll collection system which already placed approximately 300,000 devices in the first 5 months of distribution; the Welfare Ecosystem reported income of €825m (+13.6%), with a significant increase in the health area (income €472m, +20.5%), with UniSalute in constant growth (€301m, +10.5%); finally, with income of €1,171m, the Property Ecosystem recorded +8.3% growth.

The Group reported direct income of €2,480m in the life business, down 5.7% compared to the figure of €2,629m recorded in the first six months of 2021. The income mix was mainly directed towards hybrid and unit-linked products, in line with a strategy aimed at reducing capital absorption and the minimum guaranteed rate, with about 45% of the reserves already eliminated as at 30 June 2022.

In this context, UnipolSai reported €1,261m in direct income (-10.6% compared to the first half of 2021 which had benefitted from certain one-off collective/corporate contracts), while in the bancassurance channel, Arca Vita, along with its subsidiary Arca Vita International, reported direct income of €1,190m (+2.1% compared to €1,165m in the first half of 2021).

The pre-taxresult for the life business amounted to €147m compared to a normalised1 figure of €106m in the first six months of 2021 (on the other hand, the book value amounted to €114m). The growth was linked to an improvement in both the technical and financial margin increases benefitting from the framework of increasing current and prospective interest rates.

Real Estate Business and Other Businesses

Acquisitions were made during the half-year period of over €200m, favouring prestigious locations in Rome and the logistics sector. Work continued on construction of the new multi-storey building to be used as offices in Piazza Gae Aulenti in Milan along with the renovation and development of the property assets. The tower was designed and built with a view towards obtaining the highest level of certification in terms of energy and water savings, along with the ecological quality of the interiors (Leed Platinum certification).

With regard to the other businesses that the Group operates in, there has been a significant recovery in the hotel sector in particular for the summer season. For the most part, the other Group businesses broke even.

There was a pre-tax loss in the real estate and other businesses of €33m compared to a normalised1 loss of €43m as at 30 June 2021 (on the other hand, the book value of the loss was €31m).

Financial Management

With regard to financial investment management, diversification continued in asset allocation through the first half of 2022 in order to further reduce investments in Italian govies to the benefit of other core and real asset European area govies with the aim of optimising the risk-return profile of the portfolio and to reduce the volatility of the solvency ratio.

The gross return on the group's financial insurance investment portfolio was 3.4% of invested assets.