Some insights from DBRS Morningstar;
Unipol Gruppo S.p.A. (Unipol or the Group) reported a preliminary consolidated net result of EUR 866 million in 2022, around 9% higher than in 2021, driven by a generally strong performance in the Non-Life business segment. On a normalised basis, the consolidated net result in 2022 stood at EUR 797 million. This excludes the badwill related to the increase of Unipol’s stake in BPER (EUR +41 million), the badwill recognized by BPER on the acquisition of Banca Carige (EUR +166 million) and the Group’s contribution to the employees’ solidarity fund (EUR -137 million). This compares to EUR 514 million consolidated net result in 2021, excluding one-offs.
Unipol’s direct insurance premiums were EUR 13,645 million in 2022, around 2.4% higher than in 2021, mostly benefiting from the 4.5% Year-on-Year (YOY) growth of Non-Life premiums. Total Non-Life premiums were EUR 8,304 million of which EUR 3,888 million related to the motor segment, and EUR 4,416 million related to non-motor segments. In line with observed Italian industry trends, non-motor related premiums grew significantly (+7.6% YOY), with strong performance across all the main product lines within the welfare and property ecosystems. Motor related premiums also increased by 1.3% YOY driven by a general increase of the customer base as well as the sales of accessory insurance cover.
While the motor business remains under pressure from the increasing frequency of claims almost back to pre-pandemic levels as well as higher average cost of claims due to inflationary pressure, Unipol’s combined ratio (net of reinsurance) decreased to 93.8% in 2022, from 95% in 2021. The combined ratio of the direct business decreased to 91% in 2022 (vs. 92.5% in 2021) as a result of a significant reduction in the non-motor segment (83.4% in 2022 vs. 89.7% in 2021) partially offset by the increase in the motor segment (99.4% in 2022 vs. 95.3% in 2021).
Amid generally unfavourable economic conditions with high market volatility and increased cost of living significantly affecting the demand of life insurance policies, Unipol’s Life premiums remained almost stable YOY at EUR 5,341 million in 2022. The reduction of both traditional and unit-linked related premiums (-16.4% and -15.5% YOY respectively) has been offset by a significant increase of pension funds (+122.8% YOY).
Unipol’s investment allocation strategy remained conservative with the vast majority of investments allocated to fixed-income securities (79% at end-2022 vs. 83% at end-2021). Allocation to real estate investments increased to 9.3% of total, compared to 7.3% at end-2021. The overall exposure towards Italian government bonds continued to decrease to 33% at end-2022, compared to 39% at end-2021 and 42% at end-2020.
Albeit decreasing from 284% at end-2021 to 272% at end-2022, the consolidated Solvency II ratio of the main operating entity (UnipolSai) remained well above the minimum requirements and continued to provide a sizeable cushion against adverse market conditions.
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