First half of 2014 positive for the Cattolica Group

PROFIT INCREASED BY 30.2% 56 MILLION IN THE FIRST HALF-YEAR

The results for the first half of 2014 approved by the Board of Directors.

The comments of the Chairman Paolo Bedoni and of the Managing Director Giovan Battista Mazzucchelli.

Total premiums written totalling € 2,957 million (+30.6% compared with the first half of 2013) with a consolidated net profit of € 56 million, up 30.2% when compared with June 2013.

Total premiums for direct business were made up of non-life premiums for € 844 million and life premiums for € 2,070 million. The combined ratio continued to improve to 91.5% when compared with June 2013 (93.5%).

The solvency margin¹ stood at 1.45 times the regulatory minimum² .

These are the highlights of the Consolidated interim report as at June 30th, 2014 approved by the Board of Directors of Cattolica Assicurazioni, which met today in Verona under the chairmanship of Paolo Bedoni.

 

The first six months of the year revealed for the Cattolica Group a significant increase in consolidated net profit of € 56 million, up 30.2% compared with € 43 million in the same period of 2013.

The Group net profit³ of € 48 million increased by 60% compared with € 30 million in June 2013. Total premiums written for direct and indirect life and non-life business⁴ amounted to € 2,957 million, up 30.6% compared with € 2,264 million in the first half of 2013.

Non-life business Premiums written for direct business fell from € 875 million as at June 30th, 2013 to € 844 million at the end of June 2014 (-3.5%). In the motor segment, premiums written amounted to € 501 million, down by 5.5% when compared with June 30th, 2013, against a market figure, which showed in the first quarter of 2014 a drop in premiums written in the motor segment by 5.7%⁵ . The Group counteracted the generalised drop in the average premium on the market acquiring new customers (more than 52 thousand new motor polices were sold at the beginning of the year; +2.4%⁶ ).

Non-motor classes, with premiums written of € 343 million are slightly down when compared with June 2013 (€ 345 million, -0.4%), resulting, rather than from a given market trend, from specific assumptive choices that favour an increase in premiums written related to policies for retail customers.

The combined ratio⁷ continued to improve, dropping from 93.5% as at June 30th, 2013 to 91.5%, disclosing a further improvement even when compared to the end of 2013 (93.5%).

Life business

In the life business, direct premiums written stood at € 2,070 million, improving compared to the first half of 2013 (+50.5%): traditional classes (Class I +57.8% and Class V +27.4%) and class III (+48.4%) increased.

Financial operations and financial position

The results of investments⁸ amounted to € 264 million (compared with € 252 million as at June 30th, 2013). Investments as at June 30th, 2014 amounted to € 18,796 million. Gross technical provisions for non-life business amounted to € 3,641 million (€ 3,072 million as at December 31st, 2013). The considerable growth in premiums written pushed the life business provisions, which include financial liabilities, to € 14,432 million (€ 13,165 million as at December 31st, 2013).

The figures as at June 30th, 2014 confirm the Group's equity soundness with a consolidated shareholders’ equity of € 1,652 million (€ 1,561 million as at December 31st, 2013). The Group's solvency margin amounted to 1.45 times the regulatory minimum.

This value takes into account the acquisition of Fata Assicurazioni on June 11th, 2014.

Sales network

The agency network at the end of June 2014 had 1,590 agencies (including 165 agencies of Fata Assicurazioni) and bank branches that place products of the Group as at June 30th, 2014 were 5,959.

Outlook for business activities

In a still uncertain macro-economic context, the Group will continue to pursue all actions aimed at consolidating the overall result.

Life premiums written will continue to focus on the value of the products distributed through various channels.

Non-life classes, despite the strong competitiveness in the market, will consolidate profitability due to the actions already undertaken to protect the quality of the portfolio.

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The Chairman of Cattolica Assicurazioni, Paolo Bedoni, declared: "The excellent results of the interim report must be read with a twofold view. On the one hand, they are the really encouraging bases for starting a three-year plan that we will launch in September and that will have ambitious targets for growth in terms of quality and size of the Group supported by important choices on innovation, organisation, efficiency and competitiveness. On the other hand, they show the great attention of Cattolica to company profitability and hence to the consistency of a dividend policy that rewards the loyalty and quality of the corporate base and the reliability of the shareholders of the Group. In particular, this interim report shows that Cattolica produces and distributes value as part of a gradual consolidation of its financial position thanks also to an investment policy for enhancing its social and territorial location".

The Managing Director of Cattolica Assicurazioni, Giovan Battista Mazzucchelli, declared: "The half-year figures show extremely positive indications with regard to the capacity of Cattolica to continue to grow significantly despite the persistent economic and market difficulties that oblige the insurance companies to compete increasingly. The growth in consolidated net profit by more than 30 per cent compared to last year is the result of improvement in both technical efficiency and portfolio quality as part of a decline in prices and increase in the number of insured customers. In this regard, we note the further significant improvement of the combined ratio determined by the constant recovery of efficiency and productivity, in particular. We have reason to believe that this framework will be strengthened in the second half of the year so we can start the new business plan with a 2014 characterised by more than satisfactory results for our shareholders".

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The executive appointed to draw up the corporate accounting documents, Giuseppe Milone, declares according to paragraph 2 Article 154bis of "Testo Unico della Finanza" that the accounting disclosure contained in this press release conforms to the documental results, the books and the accounting records. The company informs that the Interim report as at June 30th, 2014 of the Cattolica Group, inclusive of the Independent Auditors’ Report, will be available to the public at the Registered office and on the Company's web site www.cattolica.it, as provided and within the time required by applicable laws and regulations. The reclassified statements as at June 30th, 2014 of the Consolidated interim report of the Cattolica Group are attached herewith, by informing that the expected Independent Auditors’ Report has not yet been issued. 

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¹ Takes into account the acquisition of Fata Assicurazioni, whose impact on the solvency margin, net of the subordinated loan of € 100 million issued on December 17th, 2013, which was partly used to finance the acquisition, is 0.05 times the regulatory minimum.

² The statement of financial position figures at the close of the first half of 2014 include those related to FATA Assicurazioni acquired on June 11th, 2014, whose economic effects will be consolidated by the Cattolica Group as from the second half of 2014.

³ Net of minority interests.

⁴ Includes insurance premiums and investment contracts of life classes as defined in IFRS 4.

⁵ Source: IVASS circular of August 1st, 2014, like-for-like basis. 

⁶ Figure related to the period from January 1st, 2014 to July 25th, 2014.

⁷ Combined ratio of retained business: 1-(Technical balance/net premiums), including other technical items.

⁸ Financial assets excluding investments whose risk is borne by the policyholders, gross of tax effects.