"We will have two-digit growth in non-life for sure," Lostuzzi told SeeNews last week at the opening of a renovated company office in Bulgarian capital Sofia.
"We expect this year to grow also in the life [market] but not in double digits. It's not just us, the market is flat," Lostuzzi added, without quoting figures.
Insurance penetration in the region, however, remains low, especially if motor third party liability (MTPL) is taken out, Lostuzzi noted. Furthermore, in continental Europe the proportion is 70-80% for life insurance versus 20-30% for non-life insurance, while in CEE the situation is reversed, he explained.
Generali's CEE group comprises Bulgaria, Croatia, the Czech Republic, Hungary, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia and Slovenia.
"In the region, we have the best profitability in the market. Our target for the next years is to maintain our profitability and increase growth," Lostuzzi said.
Last year, the group posted an operating profit of 284 million euro on the life segment in CEE, up from 198 million euro a year earlier. In the property and casualty segment, it booked an operating profit of 385 million euro, up from 296 million euro in 2022.
"We performed very well. Last year was not an easy year," Lostuzzi said. "Despite this, our region produced very good results, we overachieved all our targets."
He mentioned high inflation, especially rising medical costs in Bulgaria and Serbia, as well as growing labour costs in the car repair market as factors impacting the company's performance.
In Slovenia, devastating floods had a strong negative effect on the company's performance, as Generali had to pay 16 million euro worth of claims.
"But we have to get used to these violent events, our whole industry should be prepared for the strong storms caused by global warming," Lostuzzi commented.
Two other developments in Slovenia too affected negatively the company's operations. In April 2023, Slovenia's government capped the price of supplementary health insurance - a major business line for Generali - and then scrapped it altogether as of January 1, 2024.
To make its operations more efficient and boost growth, Generali is overhauling its core IT system in Hungary, Croatia and Slovenia and adapting its AdvanceCare platform for health insurance services to the markets of Hungary and Serbia.
"This is a platform that we have in Portugal to manage properly our health business. It is a line of business which we expect to grow in importance," Lostuzzi said, adding that the company is the market leader in health insurance in Serbia. Bulgaria is expected to be the next market to join the project, he added.
Generali is also looking to develop its sales network to offer the full range of its services, as it is runs pension funds and asset management companies in some of the CEE markets.
"Our role is to increase our activity not just in terms of selling the insurance product but advising the client which type of risk they are running and to become more aware how to cover it," Lostuzzi commented. There is a social aspect to it, but if you want to have a real change in society you need to have the support of the government, he added.
Jun 28, 2024
