General cuts costs, and confirms the target to 2018. These are, at the moment, the two key steps of the upgrade plan presented today at the Investor Day in London.
cost reduction will be pursued through rationalisation of the operating machine that you will get with two different maneuvers. On one side, we will proceed with the optimization of geographical presence, through the exit by the markets ‘not attractive’ and the other will be promoted to a programme of restructuring and simplification of structures in the mature markets.
General: cuts to 200 million, and no restructuring of staff
The double intervention, which will lead to a significant reduction of the work force, it will bring revenue to 1 billion euros and a net reduction of expenditure of 200 million. This will be combined with a plan to increase 15% productivity through programs fit to lead. The general context obliges then to actions targeted on the sector Damage and on the Life. In particular, the company intends to improve the technical performance with the goal of continuing to exceed our competitors in terms of combined ratio. This will be guaranteed by a greater sophistication in rates branch drive, from innovative offerings in the damage not the car and from a better management of claims.
In Life, however, the General intend to reduce the average value of the warranty up to 1.5% and to rebalance the portfolio in favour of business-friendly low capital absorption. The group also wants to increase the loyalty of customers and reinforce the brand. All actions to confirm the financial targets for 2018, releases in may 2015, which include dividends accumulated to more than € 5 billion, cash generation of over 7 billion and a return on equity operating average exceeding 13 percent.
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