• Total premiums risen by 4.8% to € 18.1 bn
  • Group net profit of € 438 m slightly above 2013 target
  • Good level of combined ratio (95.7%) reached despite natural catastrophes
  • Increased net investment income with a 4.0% net return
  • About € 330 m paid to customers for flood, hail and storm claims

Cologne - Despite the high adverse impacts caused by flood, storm and hail claims, the Generali Deutschland Group reached a Group net profit of € 438 m (2012: 506 m; 2012 figures in brackets in the following) in the business year 2013, thus reaching its profit target of above € 430 m. In 2012 extraordinary tax impacts and capital gains due to the disposal of Generali Deutschland Immobilien GmbH had positively influenced the net profit. A substantial increase in total premiums by 4.8% to € 18.1 bn (17.2 bn) and a good level of the combined ratio, which - in view of extraordinary claims - was of 95.7%, illustrate the positive technical performance of the Generali Deutschland Group comprising companies such as AachenMünchener, CosmosDirekt and Central Krankenversicherung.

Single premiums in life insurance substantially contributed to the rise in premiums of the German operation. However, increase in premiums in property and casualty insurance well above the market average is particularly pleasing. Above all, this is attributable to higher premium income in motor insurance. The extraordinarily high expenditure of € 136 m net caused by the natural catastrophes led to an increase of the combined ratio to 95.7% (93.4%). In a continued low-interest environment the net investment income rose by 7.5% to € 4,005 m (3,725 m). On the basis of the average investment portfolio this equalled a yield of 4.0%. Higher volume of realized capital gains from the disposal of fixed-income securities markedly contributed to this development. The realization of reserves at market value was also necessary to finance the compulsory creation of an additional interest reserve as well as the additional participation of policyholders in the hidden reserves in life insurance.

"We have again been able to further improve in insurance business, despite a difficult market environment also marked by regulatory burdens. This shows that our strategy is of sustainable success", said Dietmar Meister, Chief Executive Officer of Generali Deutschland Holding, in Cologne at the accounts press conference for the business year 2013.

Growth in life insurance
In life insurance the total premiums, before the deduction of savings portions and premiums of investment contracts, rose markedly by 6.6% to € 12,488 m (11,714 m). Growth was primarily due to single-premium new business which saw an increase to € 4,264 m (3,551 m). There was demand above all for the pension insurance products "Flexibles Vorsorgekonto" of CosmosDirekt and the "3-Phasen-Rente" of Generali Versicherungen. Regular-premium new business, however, decreased to € 716 m (780 m), as expected. The overall new business in terms of APE (Annual Premium Equivalent1) rose to € 1,143 m (1,135 m). The share of capitalization products in new business was reduced as planned.

The positive overall development of the life insurers shows that the customers continue to regard life products as indispensable elements of private provision for retirement. For them the safety of a life-long cover remains paramount. Furthermore, it is to be noted that the yield continues to be stable and attractive compared to other types of investment. The development in the regular-premium new business, however, appears to indicate that many customers feel insecure and are reluctant to take out long-term contracts. "The current low-interest policy gives the wrong signal and is mainly to the disadvantage of people saving for their retirement", Dietmar Meister stated.

Premium income decreases in full-health cover, more persons insured under supplementary health covers
Amid a difficult environment for private health insurance in general, the development in the health business was primarily influenced by the strategic reorientation of Central. Premium income fell, as expected, to € 2,138 m (2,247 m). This is mainly due to the decrease in the number of persons with full health covers by 9.2% to 379,213. In terms of supplementary health covers, the good market positioning in the "Pflege-Bahr" long-term care business had a positive impact. All in all, the business in force in supplementary covers expanded by approximately 5% to 2,616,103 insured persons.

Positive development in property and casualty insurance
The property and casualty insurers of the Generali Deutschland Group were able to increase their premium income by 4.8% to € 3,430 m thanks to a higher level of average premiums and of new business. The distribution strength of the German operation and innovative combined products, such as "Generali Privat" (Generali Versicherungen) or "VERMÖGENSSICHERUNGSPOLICE" (AachenMünchener) had a positive impact on new business. The claims experience in 2013 was primarily influenced by the natural catastrophes, a higher number of major individual claims and the strong growth in the number of policyholders. The damage in the wake of the June floods and the higher level of storm and hail claims caused by the cyclones "Norbert", "Andreas", "Ernst/Franz", "Christian" and "Xaver" involved a claims expenditure of € 136 m, net. Improvements in active claims management attenuated the impact on the combined ratio, which thus rose to only 95.7% (93.4%) and is at a very good level compared to the market. Without the extraordinary claims events, the Generali Deutschland Group was able to keep the combined ratio below 95%, as planned.

Fast help for our customers
Amid the large number of claims caused by natural perils in the year 2013, the Generali Deutschland Group was able to demonstrate its outstanding quality in claims management. The concentration of a large number of fieldstaff employees of its claims management company in the operation centres of the regions affected by the flood and the collective inspection of hailstorm claims by about 60 motor experts contributed to helping customers fast and professionally. All in all, more than 36,000 motor cars were assessed in about 160 collective inspections. The fact that claims managers were well linked by a portal-based internet platform also had a positive effect. The initial lump-sum assistance payment of € 1,000 each to customers affected by the floods, which was later set off against the total compensation, ensured that help was provided fast. As a whole, the Generali Deutschland Group paid about € 330 m to its customers for the more than 150,000 notified natural catastrophe claims. The vast majority of that amount, approx. € 100 m were attributable to the floods and about € 200 m to storm and hail events.

"The high level of damage caused by flood, storm and hail in 2013 again illustrates our function in society, which is to cover risks in order to prevent that the damage turns into a catastrophe for the persons affected. Our claims management did a great job in mastering this challenge", said Dietmar Meister.

Net investment income improved
In 2013 the situation in financial markets continued to ease and there were no major adverse impacts. The European Central Bank (ECB), however, maintained its expansive monetary policy to the detriment of those saving money for their retirement. Mainly due to the realization of capital gains by the disposal of fixed-income securities, the net investment income rose by 7.5% to € 4,005 m. On the basis of the average investment portfolio (without the investments of unit-linked life insurance) this equals a yield of 4.0%.

"Nevertheless it is about time to no longer try to solve the euro, financial and economic crisis on the back of savers", comments Dr. Torsten Utecht, Chief Financial Officer of Generali Deutschland Holding.

International integration and squeeze-out
Currently the insurance industry is facing a large number of challenges. In order to be able to cope with these challenges successfully the Generali Deutschland Group, in conjunction with its parent company, will continue to change and to adapt to become more powerful in the future. One important step in this context is the so-called squeeze-out. At the extraordinary general meeting of December 4, 2013 the shareholders of Generali Deutschland Holding AG approved the transfer of the shares of the remaining minority shareholders to Assicurazioni Generali S.p.A. against an adequate compensation in cash with a majority of 99.3% of the votes validly cast. By means of this measure Assicurazioni Generali has created the conditions for better integrating the German operations into the international Generali Group.

Continuation of succesful development
The Generali Deutschland Group is part of the international Generali Group and can thus benefit from the advantages of a strong national and international group of companies. The diversity of brands and distribution channels as well as the longstanding strategic partnership with Deutsche Vermögensberatung and its about 37,000 financial advisors made it possible for the German operation to successfully expand its market position again in the business year 2013. The Group proceeds from the assumption that with its well-proven business model it will be able to further strengthen its very good competitive position in retail business and with small and medium-sized commercial clients also in the year 2014.

"In order to be able to further expand our excellent market position, we have to regard change as an opportunity. The further optimization of our processes and continuous improvements in our structural positioning allow us to respond faster and more flexibly to the requirements of the market. An active cost management helps us to remain competitive in these challenging times and lays the foundations for being able to successfully benefit from market opportunities", Dietmar Meister explained.

Provided there are no extraordinary claims events in the current year and investment income is not affected by substantial adverse impacts, the Generali Deutschland Group expects to achieve a further increase in the net profit for the business year 2014.

Under IFRS, according to the German regulation, technical items of the Balance Sheet and Statement of Comprehensive Income are presented based on US-GAAP.

1market standard to determine premium income under new business, equalling regular premiums plus 10% of single premiums

Forward-looking statements
To the extent this Release includes prognoses or expectations or forward-looking statements, these may involve known and unknown risks as well as uncertainties. The actual results and developments may therefore differ materially from the stated prognoses or expectations. Besides other reasons not specified here, deviations may be the result of changes of the overall economy or of the competitive situation, especially in core activities or core markets. Deviations may also result from the extent and the frequency of claims, lapse ratios, mortality or morbidity rates or tendencies. The developments of financial markets and of exchange rates of foreign currencies as well as amendments of national and international law, particularly in respect of tax rules, may have an influence. Terrorist attacks and their consequences may increase the probability and the extent of deviations. The company is under no obligation to update the statements made in this Release.

Generali Deutschland Group
With a premium income of about € 18.1 bn and over 13.5 million customers, the Generali Deutschland Group is the second-largest primary insurance group in the German market. The Generali Deutschland Group includes companies such as Generali Versicherungen, AachenMünchener, CosmosDirekt, Central Krankenversicherung, Advocard Rechtsschutz¬versicherung, Deutsche Bausparkasse Badenia and Dialog as well as the Group-owned service providers Generali Deutschland Informatik Services, Generali Deutschland Services, Generali Deutschland Schadenmanagement and Generali Deutschland SicherungsManagement.

Contact Generali Deutschland Holding AG
Dr. Andrea Timmesfeld
Head of Corporate Communication
Tunisstrasse 19-23
50667 Cologne (Germany)

Phone: +49 (0) 221 4203-1116
Fax: +49 (0) 221 4203-3830
E-Mail: presse@generali.de
http://www.generali-deutschland.de
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