Isn't Switzerland lucrative enough?
Allegedly, the reasons for thinking about the insurance company are that Switzerland does not offer a particularly promising market. So consultants are now sounding out whether a sale makes sense? completely or partially ? out. However, the discussions on this are still in a very early phase, so nothing definitive can be said yet.
Generali has around one million customers in Switzerland and has annual premium income of around two billion francs. The profit was also impressive and was around 194 million.
The speculation continues: If the life insurance portfolio were to be sold, it could generate up to two billion euros in the coffers. The reason: The life insurance business is considered to be extremely capital-intensive and other large corporations have already separated from this sector. The buyers are those companies that specialize in exactly this and handle such portfolios.
The same applies to Generali: Corona is the biggest problem
The largest insurer in Italy, Generali, is struggling with the consequences of the corona crisis. In the first quarter of 2020, the drop in profits was particularly pronounced: only 113 million euros were received. In comparison: in the previous year it was around 744 million euros in the same period. The securities in particular were the problem, because they lost massively in value. As a result, operating profit also fell massively, although it is still not possible to estimate how far the crisis will really have an impact and how deeply profit can fall. The group is now trying to counter the crisis with extensive savings. Nevertheless, the group expects massive problems from Corona, although the crisis will continue into 2021 and there will hardly be any increases in profits or at least adjustments to profits. The crisis puts the insurer in a mess as well as others, because the damage is much higher, plus the loss of dividends and a lack of rental income. Victims of the pandemic and representatives, however, must be compensated; they are entitled to the promised aid payments. And what is the management of the insurance group doing? She responds with savings, designs cost-cutting programs and lets agents travel less. In conjunction with so-called natural reductions (for example, no more new hires if employees are lost due to termination or retirement), the necessary funds should be made available.
Conclusion: Generali life insurances in crisis
Like other insurance companies, Generali's life insurance suffers. The insurance group is expected to try to raise the necessary funds through a sale of the insurance division? Life insurance? and is even considering withdrawing from the Swiss market entirely. Commissioned consultants are currently examining whether this plan will actually be implemented or not. A final decision is still pending.
