Chairman's and Group CEO’s letter
Letter from the Chairman
I am particularly pleased to present the 2014 Annual Integrated Report, which illustrates the progress made by the Group in 2014 and the results for all our stakeholders. Generali has consolidated its position and its role as a major player in the international insurance industry, confirming the quality of choices on which are based the complex and challenging strategic redesign commenced almost three years ago.
All of this took place against the backdrop of an uncertain global environment - characterized by diverse trends in the large international areas - which unfortunately kept the low rate of growth of the world economy in line with that of previous years.
This is a complex scenario, in which the role of an insurance group like Generali is important and valuable, both for its ability to create value and become an impetus of development, anticipating and dealing with challenges. For instance, the theme of demographic changes, where longevity and aging processes represent a critical issue for choices in terms of welfare, or the theme of environmental challenges, climate change and its consequences, which greatly expands the possible actions of the industry in which we operate.
The report and results of Generali confirm the Group's position as a global player, modern and innovative. The results were achieved thanks to the work of all the employees led by a management capable of managing the company in a difficult turnaround process towards a new, important chapter in its history at the international level. This demanding work was possible also due to the choice of transparent governance, in line with the best market standards, and thanks to the unwavering contribution of the Board and other corporate bodies, that represent a solid reference point in support of the management.
I am sure that this report will be only an excellent chapter of a further long story of which all of us are proud.
Gabriele Galateri di Genola
Letter from the Group CEO
2014 was a crucial year for Generali. At 31 December, a turnaround phase ended that had few precedents in the industry and that now allows the Group to start a new phase in the market to regain the place of excellence it deserves. When in 2013 we set ambitious targets in terms of Solvency, operating result, cash flow and cost reduction, not everyone was willing to believe that we would make it. Instead today, we can state, with a year in advance, that the Solvency I ratio reached 164%*, operating result amounted to € 4.5 billion, allowing net result to exceed € 1.6 billion**, cash flow amounted to € 2.8 billion, and that all other targets were met or exceeded. It was a difficult path, through the sale of numerous non-core activities. At the same time we acquired minority interests in activities critical to our business, which we now have full control of, especially in Eastern Europe, where we continue to grow and consolidate our leadership position; and we reorganized the business in Italy with the creation of a single brand for the country.
In 2014, Generali confirmed its role as a major international player, with over € 70 billion premiums. International presence is our greatest strength: Generali is a large European centric company and continues to build, with a selective focus, its presence in Asia and South America.
This report also illustrates the progress made in areas other than in the industrial and financial ones. Our activities, by their very nature, impact and benefit our clients, our people, our sales force and, to a greater extent, also the communities in which we operate: in the following pages, we explain how we are trying to exploit even more our potential. It is not a requirement dictated by custom, but the best way to ensure that our business can prosper in the long term.
We look to the future with greater confidence. We work to build the Generali of a tomorrow that is around the corner, with continuing connections with the present and future needs of our clients, constant attention to the opportunities offered by technological development, an even more efficient business model, a more global and even stronger brand.
We have achieved results to be proud of, thanks to the commitment of all the women and men who, through various roles, work for our Group worldwide. That is why, their faces are the fairest illustration of the 2014 Annual Integrate Report.
*Including the disposal of BSI
**Net of some significant extraordinary impairments