Generali provides dividend cheer, no exposure to SVB

By Gianluca Semeraro

MILAN (Reuters) – Italys Assicurazioni Generali surprised investors on Tuesday by hiking the dividend payout on its 2022 results after posting its best operating profit ever.

Finance chief Cristiano Borean also told reporters the leading Italian insurer had no exposure to collapsed U.S. lender Silicon Valley Bank (SVB) and just “a marginal” position in its third-party risk portfolio.

Startup-focused SVB last week became the largest bank to fail since the 2008 financial crisis, sending shockwaves through the global financial system and prompting regulators to step in to contain the fallout.

“There is a crisis every year. Our excellent solvency, which results from a very diversified business model, has enabled us to overcome all the crises of the last seven years,” Generali Chief Executive Philippe Donnet said.

With its net profit up 2.3% to 2.91 billion euros ($3.11 billion) in 2022, despite a 154 million euros hit from Russian investments, Generali is set to pay a dividend per share of 1.16 euros, “a remarkable” 8.4% higher than the year before, Jefferies analysts said.

Generali shares were up 2% in early trade, outperforming a flat Italian blue-chip index.

Operating profit, the figure most closely watched by the market, rose 11.2% to 6.5 billion euros, above an analysts consensus provided by the company of 6.19 billion euros as higher interest rates boosted the life insurance business, while the non-life business proved resilient.

The solvency ratio, a measure of the financial strength of Generali, stood at 221% at the end of 2022 and had risen to 230% as of March 10.

“We are on track to achieve the targets and ambitions of our strategic plan, delivering sustainable growth to create value for all our stakeholders, even in a challenging geopolitical and economic context”, Donnet said.

($1 = 0.9354 euros)

(Reporting by Gianluca Semeraro Editing by Alvise Armellini and Mark Potter)