Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Unipol Gruppo SpA (WBO:UNI) reported a solid quarter with strong performance in both P&C and life insurance segments.

• The company achieved a current yield of 4.3% from investments, significantly higher than the previous year.

• Solvency ratio closed at a robust 224%, indicating strong financial health.

• The Bank Assurance Distribution Network contributed positively to the company's performance.

• The company is on track to meet its profitability targets for the industrial plan.

Negative Points

• The motor business combined ratio remains above 100%, indicating challenges in achieving profitability in this segment.

• There are concerns about the impact of the Milan Court scheme on bodily injury compensation, which has increased costs.

• The company faced a one-off cost due to the merger between Unipol Gruppo and Unipolsai.

• The redundancy plan provision impacted pre-tax profits, particularly in the P&C segment.

• Potential changes in Italian fiscal regulations could affect future financial outcomes.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with WBO:UNI.

Q: How is the evolution of the average premium in P&C, and what are the expectations for the motor business combined ratio? A: The average premium is increasing, and the company expects a 5% increase by year-end. The combined ratio is expected to improve, with favorable trends in claims and premiums. However, the exact achievement of the combined ratio target will depend on the evolution of aggregates in the next quarter. (CEO)

Q: Are there any one-off factors affecting the pre-tax profit of P&C? A: Yes, there are costs related to the merger between Unipol Gruppo and Unipolsai, and investments in Unipol Move and Unipol Rental. These are considered one-off factors impacting the pre-tax profit. (CEO)

Q: What is the outlook for the dividend policy? A: The company aims to maintain a competitive dividend policy in line with the insurance sector. The dividend decisions will be based on the profitability targets of the industrial plan and the company's transition to an insurance operating company. (CEO)

Q: Is the additional provision for the Milan Court tables complete? A: Yes, the additional provision made in June is complete and will not be repeated in the next quarter. (CEO)

Q: How does the company view the potential sale of the joint venture with Monte dei Paschi? A: The company considers bank assurance a key growth driver and is open to opportunities that create value for stakeholders. However, specific details on potential transactions were not disclosed. (CEO)