Operating result

Operating result
(€ million)
31.12.2011 31.12.2010 Fourth quarter
2011
Fourth quarter
2010
Change
YE2011/
YE2010
Change
Fourth quarter
2011/
Fourth quarter
2010
Consolidated operating result 3,927.6 4,076.6 827.2 943.9 -3.7% -12.4%
Net earned premiums                            
62,738.5 65,726.5 16,047.0 17,740.8 -4.5% -9.5%
Net insurance benefits and claims -55,036.5 -67,720.0 -15,996.9 -18,922.0 -18.7% -15.5%
Acquisition and administration costs -11,807.0 -11,638.3 -3,197.7 -3,084.8 1.4% 3.7%
Net fee and commission income and net income from financial service activities 933.4 868.3 239.9 223.5 7.5% 7.3%
Net operating income from financial instruments at fair value through profit or loss -2,905.0 4,879.9 1,200.0 1,854.5 -159.5% -35.3%
Net operating income from other financial instruments 10,658.5 12,637.9 2,765.5 3,338.5 -15.7% -17.2%
Interest income and other income 12,896.1 12,368.6 3,294.6 3,153.2 4.3% 4.5%
Net operating realized gains on other financial instruments and land and buildings (investment properties) 2,008.8 1,857.7 513.4 577.1 8.1% -11.0%
Net operating impairment losses on other financial instruments and land and buildings (investment properties) -2,974.6 -400.6 -666.3 -31.1 642.5% 2044.4%
Interest expense on liabilities linked to operating activities -614.0 -499.7 -180.6 -128.8 22.9% 40.3%
Other expenses from other financial instruments and land and buildings (investment properties) -657.8 -688.1 -195.6 -231.9 -4.4% -15.7%
Operating holding expenses -294.0 -288.3 -80.3 -84.6 2.0% -5.0%
Net other operating expenses (*) -360.4 -389.4 -150.3 -122.1 -7.5% 23.1%

(*) At 31 December 2011 the amount is net of operating taxes for € 64.1 million (€ 40 million at 31 December 2010) and of non-recurring taxes shared with the policyholders in Germany for € 45.7 million.

The operating result of the Group amounted to € 3,927.6 million (€ 4,076.6 million at 31 December 2010). Considering the performance of the non-life segment operating result, which was the strongest of the past three years owing to the significant recovery of technical margins, the decline reported may be attributed solely to the performance of the operating result of the life segment, in which technical margins improved whereas there was a considerable decline in net investment result, concentrated in the second half of the year. Despite the increase in current income and net realized gains owing to active management of the investments undertaken by the Group, the net investment result was affected by both the greater impairment losses on equity and bond portfolios and the reduction in the value of investments at fair value recognized through profit or loss.

In further detail, the aforementioned financial scenario determined gross impairment losses for € 2,905.2 million, attributable for € 1,970.4 million to the impairment losses recognized on Greek government bonds as of the second quarter and for € 934.8 million to equity investments, of which € 443.2 million refered to the investment in Telco.

Such impairments influenced the operating result to the extent the shareholder’s fund is ultimately affected, based on the financial losses not attributable to the policyholders according to the contractual and statutory profit sharing mechanisms. The net impact on the operating result thus was € 411.6 million, of which € 377.5 million was due to Greek government bonds and € 34.1 million to the equity portfolios.

Lastly, the contribution of the financial segment was positive, with a slight decline compared to the previous year, also due to the negative market performance.

Operating result by country
(€ million) 31.12.2011 31.12.2010 Fourth
quarter
2011
Fourth
quarter
2010
Group operating result 4,444.0 4,507.7 983.0 1,046.5
Italy                                       
1,499.5 1,537.3 182.9 232.1
France 557.0 754.4 148.2 243.6
Germany 683.8 712.8 212.9 174.4
Central and Eastern Europe 503.0 418.8 151.8 141.6
Rest of Europe 878.2 697.0 220.1 139.3
of which Spain 252.7 215.2 61.0 48.3
of which Austria 168.2 148.6 41.3 28.3
of which Switzerland 263.7 266.7 31.0 57.8
Rest of World 322.5 387.4 67.1 115.4
Holding expenses -294.0 -288.3 -80.3 -84.6
Consolidation adjustment -222.4 -142.7 -75.5 -17.9
Total Group operating result 3,927.6 4,076.7 827.2 944.0