Wednesday, November 23, 2016

General: cuts to 200 million, and no restructuring of the staff – The Sun 24 Hours

Insurance General presents its industrial plan in London, and launches a series of message to the market: Philippe Donnet, Ceo of the insurance group, has closed the door to plans for the restructuring of the staff, has confirmed his desire to participate in a "solution" for the Mps and denied concerns about the intention of Mediobanca, down from 13% to 10% of the shareholder base. "We have never announced 8 thousand redundancies: this number does not exist". He said Donnet, in a telephone briefing with the press agencies before the start of the Investor Day in London, referring to some press rumors of eve. "We have the goal to reduce the net costs of € 200 million in mature Countries and this obv iously is very challenging. We start from a position of efficiency, already very good, both on the branches from Damage in the branches of Life so it is not that there are redundancies in General", stressed Donnet.

"What we want to start and we have already started – said – plans are underway to increase efficiency and this will increase the productivity of 15%. Therefore: pay attention to all the costs, including staff costs. Our head count had already come down to the slowdown of new hires and exits natural. There are redundancies, there will be no plans for reductions in staff". For Italy in particular, Donnet has finally pointed out that he has already made his plans to increase efficiency from the point of view of the staff.

The gruppoconferma the target by 2018, and announced, "the optimization of geographical presence", with the output from the markets "not attractive" that it would bring revenue to € 1 billion, with a program increase of 15% on productivity, starting in mature markets, a process of restructuring and simplification, which will allow a net reduction in costs of € 200 million. These are the salient points of the update of the industrial plan and communicated at the Investor Day in London. The company perseguira is also an improvement in the technical performance. In Damage to the target and a further improvement in the Combined Ratio. In Life the General aim of a reduction of the average value of the warranty up to 1.5% and a rebalancing of the portfolio in favour of business-friendly low capital absorption. The group also wants to increase the loyalty of customers and reinforce the brand. The financial targets for 2018, releases in may 2015, include dividends accumulated to more than € 5 billion, cash generation of over 7 billion and a return on equity operating average exceeding 13%.



the General takes the Bag, you look to the cuts

it Is – points to a note in General – of the "new goals of efficiency and profitability to strengthen your competitive advantage, thanks to a distribution network, best-in-class, strong technical expertise and a cost base that is contained". All in all, the group "aims to accelerate the execution of strategy through six actions to improve operational performance and create long-term value". More in detail, the General intend to "maintain a geographical presence diverse and global", focusing on the key markets where already today it is technically strong, efficient and profitable, or in those countries that have prospects for significant growth in the medium-to long-term period. At the same time, to increase operational efficiency, improve the allocation of capital and to mitigate the risks, proceed to the exit from the markets less profitable.

As for the "rationalization of operations", the cost-reduction initiatives will be aimed at maximizing the efficiency and effectiveness, reducing duplication and eliminating overlaps in terms of products, structures, systems and processes for the benefit of management more agile and fast. On the front technical, in the damage in the Car will be enhanced the sophistication of the rates thanks to the use of data analytics and profiling telematics. In the Not Cars will have to be promoted innovative, to push the growth of the segment (gross direct premiums of between 2% and 4% by 2018), including related products, modular products, products for emerging risks (cyber risk). In the claims management tip of the other to a better identification of fraud. In the Life business, the group perseguira’ the growth of the share of new production products with low capital absorption (+8 p.p. in the three main markets, namely Italy, Germany, France).

In Life, in addition, will be pursued optimization of liabilities which, also thanks to the new production focus on the products of Unit-Linked and Protection aims to achieve a reduction of 30 bps of the guarantee in the Life portfolio to an average value equal to 1.5% until 2018, and an increase of 6 percentage points of the reserve capital-light. From the set of initiatives to retain customers, the Generali group, in addition, is expected in three years, an increase in the retention of 2 percentage points. The group focalizzera’ in greater clarity in the communication with the policy summed up in a single page, in the speed of resolution through automatic updates, with sms and App and in the simplification and digitization in the management of the practices.

The General, finally, aim to increase the visibility of the brand and the level of preference to become, by 2022 the first choice. To achieve this goal, the group will streamline the portfolio of our brands, and optimize existing investments and leverage the efficiencies cross-border. The brand will be repositioned on the issues of prevention and closer to the goods the most precious of clients (life, health, home, family and work). From these actions of strengthening, the General point to an increase of 3%, the degree of preference in mature markets and 10% to awareness in promising markets.

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