Generali chief bets on asset management for growth

Philippe Donnet, chief executive of Italy’s Generali, plans to accelerate the growth of the company’s asset management operations, a business that delivered 33 per cent year-on-year earnings growth and boosted the company’s performance during the pandemic.

The country’s largest insurer decided to boost its asset management arm two years ago through what it calls a “multi-platform” boutique that operates in a range of specialist markets, including ethical and alternative investments. It now aims to position itself among the top five global players in the space.

While many other insurers across Europe are outsourcing assets to independent managers as they struggle to be competitive, Mr Donnet said an effective combination of the insurance and asset management propositions would drive Generali’s growth.

“Our strategy was working well pre-Covid and it’s working well now,” he told the Financial Times. 

Despite a 40 per cent slump in the group’s net profit in the first nine months of the year, last week the company reported a better-than-expected operating profit, beating consensus forecasts by 13 per cent. Generali also said it would resume paying out dividends once the regulator allowed it. 

Mr Donnet said the indirect impact of Covid-19 had been negative but the direct one “quite low”, and the company was navigating the pandemic effectively by leveraging its well-diversified portfolio. He said the strategy adopted well before the pandemic to cope with low interest rates was now paying off and the company was on track to deliver its three-year plan of 6 to 8 per cent earnings growth by 2021.

“We also managed to save an extra €100m on top of the €200m that was already announced last year.”

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Mr Donnet did not rule out potential acquisitions in asset management, while he denied plans to sell the controlling stake in Banca Generali to Mediobanca. 

“We are a very happy shareholder of Banca Generali [and] there is no transaction on the table with anybody, including Mediobanca,” he said.

Mr Donnet also said Generali was open to strengthening its “strategic partnership” with Cattolica Assicurazioni, a troubled Italian insurer part-owned by Berkshire Hathaway in which it bought a 24 per cent stake in June.

Meanwhile he believes it would be difficult for the company to expand in places such as China, where the insurance market is dominated by domestic players.

“We want to strengthen our leadership position in Europe rather than going everywhere,” said Mr Donnet.



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