MILAN, March 20 (Reuters) - Generali, Europe’s third-biggest insurer, said its 2011 net profit had halved from a year earlier on the back of 1 billion euros of writedowns on Greek government bonds and equities holdings, but predicted a rebound this year.
The writedowns forced the Italian insurer, the last major European player to report 2011 results, to offer a payout of 36 percent, resulting in a proposed dividend per share of 0.20 euros.
“Our 2011 result was hit by one-off impairments, principally related to Greek sovereign securities and to the stake in Telco, which will not be repeated in 2012,” Chief Executive Giovanni Perissinotto said in a statement late on Tuesday. “We are therefore targeting a strong growth in profit for this year.”
Europe’s biggest “composite” insurers - Allianz, Axa and Zurich Financial, which like Generali operate in both the life and non-life markets - last month reported weaker than expected 2011 profits, hit by a combination of sovereign debt impairments, soaring natural disaster claims, and poor investment performance.
Generali said it had written down 76 percent of its entire portfolio of Greek instruments, broadly reflecting an agreed haircut and in line with European rivals.
Its Solvency I ratio, a measure of capital strength, was broadly stable at 117 percent at the end of December despite the deepening of the euro zone crisis in the last quarter of 2011.
The ratio stood at 118 percent at the end of September. The insurer said it had already rebounded to 132 percent by March 1, 2012, mainly due to tighter spreads on Italian government bonds and better market conditions.
Shares in Generali closed down 2.08 percent at 13.17 euros before results were released. (Reporting By Lisa Jucca)