Investment Story

Thanks to the new Business Plan, developed during the second half of 2017 and presented to the market at the beginning of 2018, Cattolica is developing a broad perspective, based on a corporate plan that focuses on profitable growth and creating lasting value.

The strategy of the Plan is based on three pillars:

  • profitable growth;
  • technical excellence;
  • innovation.

Simplification and cultural transformation of the Company cross cut the strategic actions and stand at the basis of the Plan’s pillars. The combined action of these drivers aims at exploiting the strengths already available within the Company and allowing the increase of its performance.

 

External growth and focus on customer service

 

Recovery of technical and operational excellence

 

Cattolica, in fact, can already count on:

  • a large and loyal customer base with a higher retention rate compared to the market average (+1p.p. Motor TPL);
  • territory coverage (1,500 agencies and bancassurance agreements with top market players);
  • higher Motor profitability compared to peers (-4,5p.p. of Motor TPL loss ratio);
  • leadership in distinctive segments as the Agri-food, Religious Entities and Voluntary Sector;
  • strong capital position with a Solvency II ratio over 180%.

The Company also aims at:

  • improving its technical profitability performance, in particular in Life and Non-Motor sectors;
  • increasing productivity through process automation and simplification;
  • diversifying the product mix while strengthening its distribution channels;
  • increasing the innovation degree thanks to telematics and digitization.

 

 

The Plan will radically transform the Group thanks to the actions planned for each strategic pillar that, together with those actions of inorganic growth, aim at technical and operational excellence, profitable growth and new form of services for customers. The Life mix rebalancing actions (production change towards unit linked and traditional products with low capital absorption) as well as the Non-Life ones (focus on the development of the Non-Motor business), the benefits coming from the introduction of telematics, a new ad-hoc company for specific businesses, the contribution of the JV with Banco BPM, the process optimization activity and a stronger distribution model, will enable Cattolica to achieve ambitious targets at 2020:

  • operating profit growing more than 60% (€375-400mln; €228FY16);
  • significant increase of operating ROE ≥ 10% (+4p.p.; 6% FY16);
  • dividend per share up by about 50% (> €0.50; €0.35 FY16).

These results will be achieved preserving a strong capital position with a Solvency II ratio between 160% and 180%.

 

This Plan includes some important actions taken during 2017, which refer to several guidelines of Cattolica’s strategy to develop a more competitive and sustainable business model.

  • A deep change in the organisation, culture and governance took place, 19 functional areas were reorganised, most of the management team was renewed, talents and corporate resources were enhanced;
  • an exclusivity agreement with Banco BPM was signed for the distribution of insurance products;
  • the financial structure was optimised through the issue of Tier2 bonds and the reduction of exposure on Italian government bonds.