Results as at December 31st, 2014 approved
PREMIUMS, PROFITABILITY AND CAPITAL SOUNDNESS ARE INCREASING
DIVIDEND AT EURO 0.35
The results for 2014 approved by the Board of Directors. The comments of the Chairman Paolo Bedoni and the Managing Director Giovan Battista Mazzucchelli. Total premiums written amounting to € 5,677 million (+29.5% compared with December 2013) with a net consolidated profit of € 107 million, up 66.9% when compared with December 2013, making it possible to propose a dividend to the Shareholders’ Meeting of € 0.35 per share. Total premiums for direct business were made up of P&C premiums for € 1,853 million (+8.0%) and life premiums for € 3,769 million (+41.9%). The combined ratio once again improved to 91.5%1 when compared with December 2013 (93.5%). The solvency margin stood at 1.96 times the regulatory minimum2 . These are the highlights of the 2014 draft financial statements approved by the Board of Directors of Cattolica Assicurazioni, which met today in Verona under the chairmanship of Paolo Bedoni. The dividend will be paid as from May 20th, 2015 after the approval of the Shareholders’ Meeting called in Verona on April 25th 2015.
Verona, March 18th, 2015
20143 closed with a significant increase for the Cattolica Group. The consolidated net profit, € 107 million, was up by 66.9%, compared with € 64 million in the same period of 2013. Also the Group net profit4 , amounting to € 91 million, disclosed an increase of 104.9% when compared with the € 44 million reported in December 2013. This makes it possible to propose the distribution of a dividend to the Shareholders’ Meeting of € 0.35 per share.
Total premiums written for direct and indirect life and P&C business5 amounted to € 5,677 million, up 29.5% with respect to the € 4,384 million in 2013.
Premiums written for direct business, including the premiums of Fata Assicurazioni as from the date of acquisition for € 158 million, rose from € 1,715 million as at December 31st, 2013 to € 1,853 million as at December 31st, 2014 (+8.0%.) Excluding the premiums of Fata Assicurazioni, premiums written fell from € 1,715 million as at December 31st, 2013 to € 1,695 million at the end of December 2014 (-1.2%.)
The trend registered at the end of 2014 with respect to the previous year, improved on that for the first nine months of 2014, reducing the decrease from -2.7% to -1.2%, and continues to feel the effect of the rising competition between operators and the weakness of demand associated with the overall economic situation. In the motor segment, including Fata Assicurazioni premiums, those written came to € 1,033 million (+3.4% with respect to December 31st, 2013), while excluding Fata Assicurazioni premiums, they amounted to € 938 million, down 6.1% with respect to December 31st, 2013, against market figures that showed a decline in motor premiums of 6.2% solely for the first nine months of 20146 .
The Group countered the drop in the average premium generalised on the market, acquiring new customers (at the end of December new motor policies increased by more than 119 thousand; +5.5%7 ), despite maintaining the usual prudent approach in terms of risk selection. Non-motor classes, with premiums written for € 820 million also including Fata Assicurazioni, increased with respect to December 2013 (€ 716 million, +14.6%). Excluding Fata Assicurazioni premiums, those written in the non-motor classes amounted to € 757 million, up 5.7% with respect to 2013. This increase is the result of specific assumptive choices, which favour premiums relating to retail customers' policies, rather than a clear market trend; by contrast, policies intended for the corporate segment were down. The combined ratio8 fell from 93.5% as at December 31st, 2013 to 91.5%9 at the end of 2014.
With regard to life business, direct premiums written came to € 3,769 million, up sharply with respect to the end of 2013 (+41.9%): the traditional classes rose (Class I, +45.9% and Class V, +10.4%) along with Class III (+83%). The constantly growing trend led to a flow, net of amounts settled, which was positive with a consequent increase in the overall technical provisions.
Financial operations and statement of financial position
The result of investments10 came to € 505 million (compared with € 501 million as at December 31st, 2013). Investments as at December 31st, 2014 amounted to € 19,958 million11.
Gross technical provisions for non-life business amounted to € 3,583 million (€ 3,072 million as at December 31st, 2013)12. The considerable increase in premiums written resulted in life business provisions, which include financial liabilities, rising to € 15,218 million (€ 13,165 million as at December 31st, 2013). The figures as at December 31st, 2014 confirm the Group’s statement of financial position solidity with consolidated shareholders’ equity of € 2,188 million13 (€ 1,561 million as at December 31st, 2013).
The Group’s solvency margin came to 1.96 times the regulatory minimum (1.66 times as at December 31st, 2013 and 1.46 times as at September 30th, 201414). This value takes into account both the acquisition of Fata Assicurazioni in June and the share capital increase transaction which was finalised on December 4th, 2014. Taking into account the dividend proposal, the solvency margin comes to 1.90 times the regulatory minimum.
The agency network at the end of December 2014 had 1,588 agencies (of which 169 agencies of Fata Assicurazioni) and bank branches which place Group products as at December 31st, 2014 numbered 5,985.
The Parent Company
Gross premiums written for direct and indirect business of the Parent Company amounted to € 2,367 million (€ 2,171 million as at December 31st, 2013; +9.1%), of which € 1,414 million for direct P&C business (€ 1,457 million as at December 31st, 2013; -2.9%) and € 877 million for life business (€ 686 million as at December 31st, 2013; +27.9%). The net profit on the basis of the Italian accounting standards amounted to € 109 million.
The Board of Directors will propose the distribution of a dividend to the Shareholders’ Meeting of € 0.35 per share. The dividend proposed will be payable as from May 20th 2015, with coupon detachment date on the 18th of said month (coupon number 25) and record date as at May 19th, 2015, in compliance with Borsa Italiana’s calendar.
Indications from the first few months of 2015
In an economic scenario which starts to show some signs of recovery, albeit in a context of sharp competition on the insurance market and very low rates of financial return, the Group continues its action aimed at achieving the growth objectives already shared with the market in the 2014 - 2017 Business Plan. The process for the integration of Fata Assicurazioni within the Group continues with success and within the pre-established timescales.
The Chairman of Cattolica Assicurazioni, Paolo Bedoni, declared: “The 2014 financial results show the vitality of our business structure which, last September, enabled the Cattolica Group to make choices of strategic importance like the acquisition of Fata, the 2014-2017 Business Plan and the €500 million share capital increase. These choices, which were positively received by the financial market, have enabled, already in 2014, a new phase of development for the Group and the setting of growth targets for 2017, which shall make the Group stronger and more competitive within the insurance market, also thanks to a greater capital soundness that is reflected in a significant increase of the solvency margin. These targets are linked to a further strengthening of the business model, which allowed Cattolica to withstand the impact of the crisis and puts it in a position of taking full advantage of the opportunities that may be offered by the economic recovery with investments in innovation, a cornerstone of the Plan, and the introduction of new management energies, thanks to the new organisational structure. We have many reasons to say to our members and our shareholders that they can confidently look forward to Cattolica’s future”.
Cattolica Assicurazioni’s Managing Director, Giovan Battista Mazzucchelli, declared: “2014 results are fully part of the growth path that we have started planning last September with the approval of the 2014-2017 Business Plan. Consolidated net profit (+66.9%) is in line with the targets of the Plan and is the result of a combination of factors affirming, at the same time, the strength and the dynamism of the Group. A proof of this is the further improvement in the combined ratio to 91.5% and the increase in the solvency margin to 1.96. The decision to propose to the next General Shareholders’ Meeting the distribution of a dividend of €0.35 per share fits in this context. These figures positively reflect both the acquisition of Fata, who has placed Cattolica in a leadership position in the field of the agriculture insurance business, and the share capital increase which was warmly welcomed by the financial market and that increased the Group’s capitalization. The increased efficiency and productivity enabled the Group to absorb the effects of the economic difficulties that caused the contraction, generalised in the market, of written premiums in the P&C business and in particular in the Motor sector, in which Cattolica was able to rebalance the decline in the average premium with a significant increase of clients. Life premiums are still strongly growing (+41.9%) which contributes significantly to the increase of total premiums written by 29.5%. All this is fully in line with the growth targets we have set ourselves in the Business Plan”.
The Executive appointed to draw up the corporate accounting documents, Giuseppe Milone, declares in pursuance of Article 154 bis, section 2 of the “Testo Unico della Finanza” (Consolidated Law on Finance) that the accounting disclosure contained in this press release complies with the documental results, the books and ledgers and the accounting entries.
The Board of Directors has also checked the independence requisites of the Directors on the basis of the matters envisaged by the Code of Conduct. Cattolica’s Board of Directors has therefore qualified the following non-executive directors as independent: Luigi Baraggia, Bettina Campedelli, Lisa Ferrarini, Paola Ferroli, Giovanni Maccagnani, Luigi Mion, Angelo Nardi, Domingo Sugranyes Bickel and Enrico Zobele15.
Cattolica Assicurazioni’s Board of Directors resolved the calling of the shareholders’ meeting, in ordinary and extraordinary session, for April 24th and 25th, 2015, in first and second calling respectively.
The agenda of the Shareholders’ Meeting is as follows:
1. Approval of the 2014 financial statements and the accompanying report, with consequent and related resolutions.
2. Decisions relating to the remuneration policies, in compliance with the legislative and Article of Association provisions.
3. Appointment, pursuant to art. 2386 of the Italian Civil Code and to art. 33.5 of the Bylaws, of one member of the Board of Directors.
4. Appointment of the Board of Statutory Auditors, of its Chairman and determination of its the remuneration policy.
5. Amendments to the General Meeting Regulations. Inherent and consequent resolutions
6. Authorisation to purchase and sell own shares in accordance with the law. Inherent and consequent resolutions.
1. Articles of Association: amendments to articles 6, 9-bis, 22, 20, 24, 30, 43 and 45. Inherent and consequent resolutions.
The reports on the business of the agenda will be made available care of the Registered Offices and on the website www.cattolica.it by the deadlines envisaged by current legislation.
The Company hereby discloses that the annual financial statements of Cattolica Assicurazioni, the consolidated financial statements of the Cattolica Group and the Report on Corporate Governance and the ownership structures as at December 31st, 2014, shall be made available to the public at the registered offices and on the company’s website www.cattolica.it and on the authorised storage mechanism www.emarketstorage.com, as per the formalities and by the deadlines envisaged by current legal and regulatory provisions. A conference call has been organised for the presentation of the results at 9.30 a.m. tomorrow, March 19th, 2015 (with double Italian/English audio). The telephone numbers to call are: + 39 02 805 88 11 from Italy, + 44 1212 818003 from the United Kingdom and +1 718 7058794 from the United States. The presentation relating to the results will be available, in Italian and English, on the home page of the website www.cattolica.it in the Investor Relations section.
1 Combined ratio of retained business: 1 - (Technical balance / Net premiums) inclusive of other technical items. Inclusive of the technical balance of Fata Assicurazioni from the acquisition, in June.
2 The figure takes into account both the acquisition of Fata Assicurazioni in June 2014 and the share capital increase which was finalised on December 4th, 2014. Before dividend distribution of the Parent Company. Includes the dividend distribution proposals of the subsidiaries.
3 The figures as at December 31st, 2014 include those relating to FATA Assicurazioni acquired in June.
4 Net of minority interests.
5 They include insurance premiums and life investment contracts as defined by IFRS 4.
6 Source: IVASS Circular dated January 7th, 2015.
7 Figure relating to the period as from January 1st, 2014 until December 31st, 2014 (excluding Fata Assicurazioni).
8 Combined ratio of retained business: 1 - (Technical balance / Net premiums) inclusive of other technical items.
9 Inclusive of the technical balance of Fata Assicurazioni from the acquisition, in June. Excluding the technical balance of Fata the Combined Ratio stands at 91.5% anyway.
10 Financial assets excluding investments whose risk is borne by the policyholders, gross of the tax effects. The result takes into account impairment for € 7 million, net of taxation and shadow accounting.
11 The amount of the investments net of the figure related to Fata Assicurazioni totals € 19,357 million.
12 Gross technical provisions for non-life business without Fata Assicurazioni amounted to € 3,085 million.
13 Figure post-share capital increase finalised on December 4th, 2014.
14 Figures as at December 31st, 2013 and December 31st, 2014 prior to dividend distribution. Figure as of September 30th, 2014 after dividend distribution.
15 You are hereby reminded that on May 8th, 2013 Cattolica’s Board of Directors resolved the non-application of the independence requirement envisaged by point 3.C.1 e) of the Code of Conduct in compliance with the recognised need to show preference with regard to an essential valuation.