Operating result

Operating result

The operating result for the property&casualty segment increased to € 1,831 million (€ 1,619 million at 31 December 2013). The significant increase observed (+13.1%) is mainly attributable to the technical result, with a Group Net Cor of 93.8%, improving by 1,9 p.p. compared to the previous year.

With reference to the fourth quarter of 2014, compared to the same period of the last year, the operating result increased (+5.3%), due to the development of the technical result in the fourth quarter.

The operating return on investments of the property&casualty segment increased to 4.70% (4.54% at 31 December 2013).

Technical result

(€ million) 31.12.2014 31.12.2013FOURTH QUARTER 2014FOURTH QUARTER 2013
Technical result 1,082 794 205 78
Net earned premiums 19,622 19,788 4,927 4,902
Net insurance benefits and claims -13,084 -13,552 -3,294 -3,424
Net acquisition and administration costs -5,312 -5,372 -1,375 -1,376
Other net technical income -144 -69 -53 -25

The technical result amounted € 1,082 million, registering a strong growth with respect to 2013 (+36.2%); the technical result includes the impact of catastrophic claims of approximately € 238 million. These events relate primarily to the floods that had repeatedly hit Italy in January, May, October and November and the storms of June in Central Europe. Similar events had an impact on 31 December 2013 for approximately € 460 million.

The worsening of the Other net technical income is primarily attributable to Italy for non recurring positive effects recorded in 2013 related to ceded reinsurance, as well as more reversal of previous years' premiums.

  31.12.2014 31.12.2013 Change
Combined ratio   93.8% 95.6% -1.9
Loss ratio   66.7% 68.5% -1.8
  current year loss ratio excluding natural catastrophes 69.3% 69.5% -0.3
  natural catastrophes impact 1.2% 2.3% -1.1
  prior year loss ratio -3.8% -3.4% -0.4
Expense ratio   27.1% 27.1% -0.1
  Acquisition cost ratio   21.2% 21.3% -0.1
  Administration cost ratio   5.9% 5.9% 0.0

The combined ratio amounts at 93.8% decreasing of 1.9 compared to 31 December 2013, almost completely due to the improvement of the loss ratio (-1.8 pps); stable the expense ratio that is positioned at 27.1%.

In detail, the loss ratio registered a further improvement in respect with the results observed at the 3rd Quarter. This trend is also confirmed without considering the lower impact of catastrophic events, which weighted 1.2 pps with respect to the 2.3 pps in the previous year. The current year loss ratio excluding natural catastrophes, decreased by 0.3%; the contribution of the prior year loss ratio was also positive, which increases to -3.8 pps, in the context of the Group prudent reservation policy.

Net acquisition and administration costs amounted to € 5,312 million, compared to 31 December 2013 (€ 5,372 million). In detail, acquisition costs amounted to € 4,157, decreased of 1.2%, mirroring the trends registered in France, Central Eastern Countries, Switzerland and in the International Operations cluster. The incidence of acquisition costs on net earned premiums is slightly decreasing to 21.2% (-0.1 pps).
Administrative costs amounted to € 1,155 million, evidencing a decrease of -0.7%, mainly because of the observed effects of Italy, Germany and Switzerland. The ratio of expenses to net earned premiums remained stable at 5,9%.
The expense ratio remained stable at 27.1%.

A review of the combined ratio for the business areas of the Group will follow.


The ratio in Italy improved considerably (-3.2 pps), amounting to 89.2%. This trend mainly reflected the decrease in the loss ratio (−3.6% pps) which benefited from the positive trend of non - catastrophic events. Catastrophic claims increased, amounting to € 96 million (1.7 pps on the net cor; 0.5 pps at the end of 2013) due to the floods of January, October, November and the storms in July. The expense ratio increased with respect to the previous year, amounting to 22.1%, due to the increase in acquisition cost.


The combined ratio of France is equal to 104.9%, evidencing a decrease of 0.6 pps with respect to the previous year due to the contraction of the loss ratio, equal to 77.2% (-0.7pps). This ratio includes the impact of 2.4 pps of the catastrophic events, caused by the floods of January and the storms of June, while the impact in the prior year was of 2.8 pps.

The current year loss ratio, excluding natural catastrophes was stable. The positive trend of the retail line is absorbed by the considerable amount of claims in the auto-fleets line. Negative contribution from the prior year loss ratio considering the strengthening of the reserves related to the Buildings and General lines, likewise the observed trend of the market. Stable the expense ratio at 27.7% (+0.1 pps).


The combined ratio of Germany amounted to 92.6, strongly decreased with respect to 31 December 2013. Previous year suffered from significant catastrophic events, which weighted for 4.1 pps (1.1 pps at year end 2014). Non catastrophic claims were stable.

The expense ratio decreased by 0.2%, at 28.3%.


The combined ratio of the central and easten European countries was 87.7%, decreasing slghtly with respect to 2013 (-1.0 pps).
This ratio includes the impact of the catastrophic events of 0.4 p.p., while last year catastrophic events influenced the ratio for 4.1 pps.

Expense ratio experience (31.9%) a slight drop of -0.2 pps compared with prior year.


The combined ratio of the regional structure EMEA was 95.5%, improved slightly compared to 31 December 2013 (-0.3 pps) due to the trends observed in the main markets of the area.

The combined ratio of Spain, equal to 93.3, improved (-1.0 pps) due to the contraction of the loss ratio (-0.8 pps) and to a lesser extent to the expense ratio (-0.1 pps).

The combined ratio of Austria also improved (-0.4 p.p.), reaching 94.2% due to the decrease in the loss ratio (66.9%), despite some reserve strengthening which weighted for 1.2 p.p.

The combined ratio of Switzerland, amounting at 92.7%, registered an improvement (-1.7 pps) due to the positive trend (-2.5 pps) of the expense ratio, which amounts to 22.6%. The claim rate increased (+0.9 pps).


The combined ratio of Latin America increased by 12.4%, amounting to 113.3%, because of the trend of the Brazilian cor, which suffered from worsening of the claims rate on the motor line, caused by a specific line of business in run-off.


Financial result

(€ million)31.12.201431.12.2013FOURTH QUARTER 2014FOURTH QUARTER 2013
Investment result 1,007 1,012 218 255
Current income from investments 1,358 1,410 300 349
Other operating net financial expenses -352 -398 -83 -94

The financial result amounted to € 1,007 million, stable with respect to 31 December 2013 (-0.5%). In particular the current income from investments amounted to € 1,358 million (€ 1,410 million at 31 December 2013); this decrease is mainly attributable to the difficult context of low reinvestment rates. The actions of the Group, aiming at sustaining the result have allowed the achievement of a current return of 3.3%.

In detail, the change in current income is primarily attributable to the decline in income from real estate investments - net of amortization - decreasing from € 283 million at 31 December 2013 to € 268 million.

Despite the low reinvestment rate context, income derived from investments in fixed income securities registered a stable trend in line with the previous year, amounting to € 863 million at 31 December 2013 to € 861 million in 2014.

The current income from equity instruments, instead, recorded an increase at € 121 million (€ 94 million at 31 December 2013). Other operating net financial expenses, which include interest expense related to operating debt and investment management expenses amounted to € -279 million (€ -325 million at 31 December 2013), due to lower interest expenses on operating debt.

Operating result: Other operating items

Other operating items of the property&casualty segment, which primarily include non-insurance operating expenses, depreciation and amortization of tangible assets and multi-annual costs, provisions for recurring risks and other taxes, increased to € -258 million (€ -187 million at December 31, 2013) mainly due to increasing provisions for risks.