Generali Investor Day 2016

Accelerating our ambition for excellence

New targets on efficiency and profitability – strengthening our
competitive advantage through best-in-class distribution
network, solid technical capabilities and lean cost base

Rationalization of the operating machine

– Optimised geographical footprint (€ 1 bln cash generated by the exit
from unattractive markets)
– Fit-to-Lead programs to increase productivity by 15%
– € 200 mln net reduction of operating costs in mature markets (2016
– 2019)

Leadership in technical performance

– P&C: further improve CoR outperformance compared to peers
– Life: a reduction of average guarantee value to 1.5% and portfolio
rebalancing (+6% capital-light reserves as percentage of total) by
2018

Customer and Distributor Centricity

– Customer retention increase: +2 p.p. by 2018
– Brand strengthening: +3% preference in developed markets by
2018
– Digital initiatives to improve operating effectiveness and proposition
for customers and distributors
2018 targets confirmed
– Cash flow generation: ˃ € 7 bln
– Dividends: ˃ € 5 bln
– Average operating RoE: ˃ 13%

The Generali Group CEO, Philippe Donnet, commented: “Today we are announcing an increase in
the scope of our ambition, to be a leader where we operate and deliver excellence in everything we do.
We are starting from a strong base: Generali is financially solid and we have a tight control on a lean
cost basis. We have established greater coordination and discipline across business units with local
CEOs empowered to monitor the progress of our strategic levers through targeted KPIs. Our goal is
leadership in our chosen markets, not measured by size but by profitability. We will further improve our
operating performance and will create long term value. We’ll improve our efficiency through significant
productivity gains and we will optimize our geographical footprint, while securing investments in key
growth markets. We will maintain and further improve our leading edge in technical performance and
excellent profitability, both on our P&C and Life business, in order to overcompensate the effects of a
prolonged period of adverse market conditions. Finally, we will focus on customers and distributors by
leveraging on data analytics and innovative telematics products. Today we confirm the financial targets
for the period 2015-2018. None of this would be possible without the unparalleled level of pride and
passion of Generali employees and our network of agents and collaborators around the world.”
23/11/2016

London – The Generali Group presents today at the Investor Day an update of the strategic
plan.
Generali confirms the targets announced in May 2015, proving the strength and the
resilience of its business model.
Despite the deterioration of the macroeconomic environment over the last 18 months and a
high degree of uncertainty on the financial markets’ future perspectives, the Group aims to
achieve by 2018 a cumulative Net Free Cash Flow of more than € 7 billion and cumulative
dividends of over € 5 billion. In reaching these targets, Generali confirms a return on equity
(RoE) at more than 13% on average over the plan period (2015-2018).
The foundations on which Generali’s strength is based are: the solidity of its capital position,
technical performances that stand amongst the best in the insurance industry, the quality
and extent of its own distribution networks and the presence in the most attractive and
promising markets. To continue to be competitive and excel in a context as uncertain as the
current one, the Group aims at accelerating the execution of the strategy through six
actions aimed at improving the operating performance and creating long-term value.

STRATEGIC INITIATIVES TO ACCELERATE OUR EXECUTION

  • Generali is accelerating its industrial turnaround to reach leadership in operating results,
    technical excellence and in the long-term value creation; thus achieving sustainable profits.
    3 ACTIONS TO IMPROVE OPERATING PERFORMANCE:
  • Optimising the geographical presence. The Group intends to maintain a
    global and diversified geographical presence by focusing where it is technically
    strong, efficient and profitable or where it can create those conditions in the
    medium-to-long-term period. At the same time, it will exit from less profitable
    markets in order to increase operational efficiency, improve capital allocation and
    mitigate risks. Thus, the rationalisation process already started with the disposal of
    the businesses in Guatemala and Lichtenstein will continue and is expected to
    generate at least € 1 billion of cash by 2018.
  • Improving the operating machine. A restructuring, integration and
    simplification process will start in mature markets to generate a net reduction in
    costs of € 200 million, while investment will be made to grow the business in a
    disciplined manner in growth markets. These actions aim at maximising the
    efficiency and effectiveness of the operating machine by reducing duplication and
    eliminating overlaps in terms of products, structures, systems and processes for
    the benefit of a more agile and rapid management of our business.
  • Strengthening of insurance expertise. In the Property&Casualty segment,
    the Group aims at a profitable growth that will enable Generali to achieve a further
    improvement of CoR outperformance by 2018, further strengthening the
    excellent level of technical profitability, already one of the best on the market today.
    The actions that will be put in place to achieve this result are set below:
    – in the Motor line, data analytics and automated profiling through MyDrive
    and Progressive, will allow the rates’ sophistication;
    – in the Non-motor line, innovative offers will be promoted to boost the
    growth of the segment (gross direct premiums between 2% and 4% in
    2018), including connected products (Smart Home), modular products,
    products for emerging risks (cyber risk);
    – in claims management, a better identification of fraud and use of analytics
    will allow to offer an excellent level of service and technical competence.
    In Life segment, the Group aims to increase the new production value through
    more capital-light products (+8 p.p. in the three main markets: Italy, Germany,
    France)

3 ACTIONS TO CREATE LONG-TERM VALUE:

  •  Rebalancing the portfolio. In the Life segment, the Group aims to change the
    business mix by shifting to more capital-light products. It will optimize its active
    liability management and will increase the new production of Unit Linked and
    Protection, in order to reduce the average guarantee of Life products by 30 bps,
    to offer an average guarantee value of 1.5% by 2018 and create a 6% increase in
    capital-light reserves.
  • Innovation with focus on customers and distribution network. The
    actions undertaken by the Group from 2015 to increase customer retention and
    profits, have already led to strong results. The Net Promoter Score project, which
    reports the level of customer satisfaction, enabled Generali to identify those areas
    of improvement on which the Group will focus. Among these are: more clarity in
    communication with the policy summed up in a single page; quicker resolution
    process thanks also to automatic updates sent through sms and Apps; and digital
    management of client files. At the same time, two other high-impact initiatives were
    identified. The first is the “Mobile Hub”, based on smartphone technology. This
    innovation provides a direct communication between the insured, the agent and the
    insurance company, allowing for a more active role by the agent, who can know in
    real time customers’ needs and how the Company is managing the file. The second
    is the “Digital Agent” initiative, using digital technology to allow 70,000 agents of the
    Group to be present in the digital space (web, mobile and social media) thereby
    responding to the new needs of the most advanced customers. From all these
    initiatives, the Group expects in three years an increase in retention by 2 p.p.
  • Strengthening of the brand. The Group aims at increasing the visibility of the
    brand and the level of preference in order to become the first choice by 2022. To
    reach this objective, Generali will streamline the brand portfolio, optimise current
    investments and leverage on cross-border efficiencies. In line with the customercentricity
    strategy, the brand will be repositioned to provide content related to
    Prevention, closer to the most valuable asset of the customers’ life (life, health,
    house, family and work). As a result of these strengthening actions, the Group aims
    at increasing by 3% the level of preference in developed markets and by 10%
    the level of awareness in promising markets.
  • Technological innovation represents the engine of the 6 strategic actions identified for
    accelerating the implementation of the industrial turnaround. Its role will enable the Group to
    continue to be competitive in a market context characterised by increasing digitisation
    altering the speed of making business, affecting the requirements of consumers and
    favouring more direct relations between customers and distributors. All this will be pursued
    in compliance with the reduction of costs and will also be achieved through new methods of
    work (digital workplace), streamlining infrastructures and process automation.

THE GENERALI GROUP
The Generali Group is one of the largest global insurance providers with 2015 total premium
income of more than €74 billion. With above 76,000 workers in the world, present in over 60
Countries, the Group has a leading position in Western European Countries and an even more
significant presence in the markets of Central and Eastern Europe and in Asia. In 2015, Generali
was the sole insurance company included among the 50 smartest companies in the world by the
MIT Technology Review.