MILAN: Italian insurer Generali said it would place more emphasis on its asset management business as it reported its net profit was squeezed due to the ultra-low interest rate environment.
The nine per cent drop in first-quarter net profit to 535 million euros ($582 million) was below the average of 607 million euros expected by analysts surveyed by the financial data supplier Factset Estimates.
Nevertheless, Generali called the profit result “solid” given the prevalent ultra-low interest rates, which have depressed returns on investments, as well as a higher tax impact on its business.
Operating profits rose 4.2 per cent to 1.2 billion euros, while return on equity edged up 0.1 percentage point to 13.6 per cent, in line with the management’s target of a ROE of above 13 per cent.
“The first quarter’s results confirm the excellent performance in terms of the group’s profitability and capital strength,” Generali’s Chief Financial Officer Luigi Lubelli said in a statement.
“In a scenario of persisting financial market volatility and low interest rates, and considering the absence of catastrophes during the previous year, Generali has continued its disciplined and effective approach to its core business,” he added.
The insurer also announced its asset management unit would broaden its investment capabilities and enlarge its product offering. — AFP
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