Earned premiums and net deposits

Gross written premiums for the life segment, including premiums related to investment contracts, amounted to € 46,393.8 million (€ 51,098.1 million at 31 December 2010). The fourth quarter of the year marked a reversal of the uptrend witnessed in the second and third quarters owing to the macro-economic and financial scenario in some of the Group’s major countries of operation, resulting in a 9.3% decline in written premiums for the year on equivalent terms compared to 31 December 2010.

This performance was influenced also by the higher short-term return rates of the government issues that affected some of the major European countries in term of single premiums, as Italy and France. This level of rate in fact favored short-term banking products to the detriment of single premiums, which declined 24%. In contrast, written premiums oriented to the accumulation of long-term savings, less influenced by the market rate, typical of the annual premium products recorded a growth (up 3.4% on equivalent terms).

The decline in single premiums was even more marked in the comparison of the fourth quarter with the total single premiums written during the same period of the previous year (down 32.8%). By contrast, annual written premiums remained at the same levels of the fourth quarter of the previous year.

Life gross written premiums
(€ million) 
31.12.2011 31.12.2010 Fourth quarter
2011
Fourth quarter
2010
Life gross written premiums(*) 46,393.8 51,098.1 12,008.9 13,826.1
Italy 12,710.8 13,793.9 3,823.9 4,280.8
France 9,007.1 11,393.8 1,671.0 2,702.3
Germany (**) 13,534.2 13,756.2 3,683.8 3,800.8
Central and Eastern Europe 1,677.5 1,766.1 408.8 540.9
Rest of Europe 5,586.9 6,668.8 1,460.5 1,566.6
of which Spain 1,051.6 920.4 280.4 245.7
of which Austria 1,194.1 1,165.3 268.5 271.6
of which Switzerland 1,101.9 978.4 334.1 296.5
of which Irelan 740.6 1,820.6 176.6 249.8
Rest of the world
3,877.4 3,719.1 960.7 934.6

(*) Taking into account premiums related to investment contracts, which amount at € 3,186.5 million at 31 December 2011 (€ 4,752.4 million at 31 December 2010).

(**)Gross direct premiums written include premiums drawn from the provision for profit sharing, which amount to € 407.1 million at 31 December 2011 (€ 477.5 million at 31 December 2010).

 

Gross direct premiums by Line of Business- life segment
31.12.2011
(€ million) 
Individual
savings and protection
Individual
unit/index
linked
Health Group Total
Italy 10,494.7 248.3 0.0 1,580.5 12,323.5
France 5,980.1 1,258.7 898.0 658.2 8,795.0
Germany 6,985.9 3,249.9 2,400.7 896.8 13,533.4
Central and Eastern Europe 1,019.3 447.5 188.2 22.4 1,677.4
Rest of Europe 1,964.8 2,562.3 269.0 761.9 5,558.1
of which Spain 682.7 13.4 0.0 355.0 1,051.1
of which Austria 670.3 276.1 230.3 0.0 1,176.7
of which Switzerland 272.4 818.6 9.0 1.7 1,101.7
Rest of World 896.8 454.8 151.0 1,611.8 3,114.4
Total 27,341.6 8,221.6 3,907.0 5,531.7 45,001.9
31.12.2010
(€ million)
Individual savings and protection Individual
unit/index
linked
Health Group Total
Italy 11,715.1 262.9 0.0 1,490.5 13,468.5
France 7,945.9 1,646.4 864.5 721.1 11,177.9
Germany 6,948.9 3,215.6 2,370.5 1,220.4 13,755.4
Central and Eastern Europe 1,089.1 483.3 174.0 19.8 1,766.1
Rest of Europe 1,874.8 3,783.6 260.7 729.8 6,649.0
of which Spain 566.9 16.7 0.0 336.6 920.1
of which Austria 644.9 289.9 221.6 0.0 1,156.4
of which Switzerland 204.9 762.6 8.7 2.0 978.2
Rest of World 865.4 400.6 117.7 1,612.8 2,996.5
Total 30,439.2 9,792.4 3,787.4 5,794.5 49,813.4

 

Gross written premiums in Italy went from € 13,793.9 million at 31 December 2010 to € 12,710.8 million, marking a lesser decline than that shown by the entire insurance market. This reduction (down 7.9%) was due to the aforementioned decrease in single premiums (down 19.9%), which were affected by the unfavourable performance of short-term interest rates, only partially offset by the excellent development of the annual premiums (+4%) and by the positive trend of the collective policies. With reference to the distribution channels, the effect of the managed drop in the financial advisors channel, althought confirming good level, resulted however in lower written premiums than that reported in the previous year, whereas written premiums from traditional networks remained essentially in line with the strong levels reported in the previous year.

Gross written premiums in France went from € 11,393.8 million at 31 December 2010 to € 9,007.1 million. Written premiums were marked by various factors, such as the uncertain tax treatment applicable to life products, the competition of banking products caused by the performance of short-term rates, and the business reorientation aimed at gradual decrease of the written premiums collected through non-proprietary channels, the margins of which are not in line with those of the Group. Thus, although written premiums declined much less severely in the third quarter than in the first part of the year, the overall decrease reported (down 20.9%) may be attributed to traditional savings policies (down 24.7%) and linked policies (down 23.5%), in particular with reference to single premiums. Written premiums from collective policies decreased, whereas the Health line continued to perform well (up 3.9%).

In contrast, gross written premiums declined moderately in Germany to € 13,534.2 million (€ 13,756.2 million at 31 December 2010), becoming the country in which the Group reported the highest level of written premiums. On the one hand, written premiums benefited from the growth witnessed during the year in the Health line, which premiums amounted to € 2,400.7 million (up 1.3%), and the development of linked policies (up 1.1%), in addition to the recovery of written premiums from traditional savings and protection policies (up 0.5%), which had been declining in the first nine months of the year. On the other hand, the 26.5% decline in collective policies resulted in a 1.6% decrease in the country’s total written premiums.

Gross written premiums in Central and Eastern Europe decreased (down 6.2% on equivalent terms), amounting to € 1,677.5 million (€ 1,766.1 million at 31 December 2010). This performance was especially attributable to the decline in annual premiums (down 32.8%) in the Czech Republic, Poland and Hungary. Finally, the Health line reported an uptrend, especially in Russia and the Czech Republic, as did collective policies.

Written premiums in the Rest of Europe decreased (down 18.0% on equivalent terms). The decline may essentially be attributed to the performance of written premiums in Ireland, which compared with the same period of the previous year was still affected by the significant written premiums realized as part of the Group’s private-banking activity, drawn up in the particular financial scenario that characterized the early months of 2010.

In Spain,the uptrend witnessed throughout the year continued, bringing gross written premiums to € 1,051.6 million (€ 920.4 million at 31 December 2010). That increase (up 14.3%) was due in particular to the positive performance of written premiums from traditional savings and protection policies (up 20.4%), especially those deriving from bancassurance business, and the continuing recovery of collective policies (up 5.5%), which had declined in the first six months of the year.

Contrary to the trend in the country’s insurance market, gross written premiums in Austria increased from € 1,165.3 million at 31 December 2010 to € 1,194.1 million, although a decline was reported in the fourth quarter. Considering the ongoing decline (down 4.8%) in the linked policies, primarily single premium policies, affected by the revision of the expected tax benefits for this type of product, the overall growth reported (up 2.5%) may be attributed to the performance of traditional savings and protection policies (up 3.9%), particularly recurring premium policies, which benefited from the signing of several contracts of especially significant amounts in the corporate pension sector. Lastly, the recurring premium Health business reported a strong performance, benefiting from, among other factors, tariff adjustments to the portfolio.

Owing to the positive performance in the fourth quarter, gross written premiums in Switzerland were essentially stable (up 0.5% on equivalent terms) reaching € 1,101.9 million (€ 978.4 million at 31 December 2010). The good performance of traditional savings and protection policies continued (up 18.6% on equivalent terms), only partially offset by the decline in written premiums for single premium linked policies, which reflects the planned decrease in this type of guaranteed policy placed through non-proprietary channels in favour of products with a lower capital absorption placed through the Group’s agency networks.

Gross written premiums in the Rest of the World continued to increase, although at a slower rate than in the first nine months of the year, driven in particular by the performance of written premiums in Latin America (up 24.5% on equivalent terms) and the Middle East(1)(up 9.7% on equivalent terms).

In particular, the development of written premiums in Latin America may be ascribed to the performance of traditional savings and protection policies (up 18.8% on equivalent terms), concentrated in Mexico, as well as that of collective policies (up 32.4% on equivalent terms), especially of the recurring premium policies witnessed in Argentina and Mexico.

With reference to Middle East, there was a significant increase in collective policies (up 8.6% on equivalent terms) and an uptrend in linked policies (up 13% on equivalent terms). By contrast, the downtrend in written premiums continued in China (down 30.5% on an equivalent basis), due both to the decline in traditional savings and protection policies (down 17.0% on equivalent terms), especially single premium policies, and the decrease in written premiums in collective policies, for which the comparison with the same period of the previous year continued to be affected by a significant adjustment of premiums issued in the first quarter of 2010 related to the pension plan in favour of the local partner’s former employees.

Net inflows
(€ million) 31.12.2011 31.12.2010 Fourth quarter
2011
Fourth quarter
2010
Net cash inflows 5,845.5 16,133.0 -650.7 3,511.3
Italy 1,084.9 1,790.3 541.2 247.8
France -2,061.0 4,443.6 -2,484.2 925.8
Germany(*) 3,433.0 4,923.4 564.6 1,163.8
Central and Eastern Europe 475.0 533.6 111.1 236.4
Rest of Europe 1,472.6 2,822.8 273.6 518.9
of which Spain -252.5 -521.5 -106.7 -117.7
of which Austria(*) 170.9 163.1 -11.8 -0.1
of which Switzerland 548.7 544.7 192.1 170.0
of which Ireland 525.0 1,687.6 118.0 197.9
Rest of World 1,441.0 1,619.3 343.0 418.6

(*) Taking into account Health business.

Net cash inflows, equal to the amount of premiums collected, less outflows attributable to the period, amounted to € 5,845.5 million. Despite the continuation of an operating context of extreme uncertainty and the unfavourable performance of short-term interest rates in its main countries of operation, the Group, thanks to effective diversification of distribution based on proprietary networks and the flexible characteristics of its life insurance products, confirmed its ability to keep its net cash inflows at excellent levels.

This result was achieved despite the significant decline in single premiums, in addition to the greater outflows granted to the customers witnessed in almost all of the Group’s countries of operation, particularly in France.

(1)Effective 30 September 2011, a part of the Israeli insurance portfolio, previously classified to the traditional business, was reclassified among unit- and index-linked portfolios to ensure a placement that better reflects the technical characteristics of the products issued.

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Life business development63.47 KB