Assicurazioni Generali SpA plans to return more than €7 billion ($7.3 billion) in dividends and buy back at least €1.5 billion in shares by 2027, as Chief Executive Officer Philippe Donnet pursues growth in asset management and high-margin insurance.
Italy’s biggest insurer pledged to increase shareholder payouts by about 30% in the three years through 2027 compared to the previous period, according to the company’s new strategic plan released on Thursday. Generali targets an annual dividend growth rate above 10% and in addition, it commits to at least €500 million in annual share buybacks, with the amount to be assessed at the start of each year.
Donnet, 64, joined as CEO of Generali Italy in 2013 and replaced Mario Greco as group CEO in March 2016. Since taking the helm, he has strengthened the firm’s finances, cut costs, focused on digitalization and expanded into more lucrative product areas, such as asset management and non-life segments. Over the plan period, the CEO aims to increase technical proficiency, further push toward digitalization and AI, and scale group-wide assets.
Generali said it will keep assessing M&A opportunities “benchmarking any potential transaction against share buybacks.” More than €3 billion have been allocated to share buybacks and other capital deployment.
“We will keep our strong financial discipline on M&A,” Donnet said in a call with journalists. “After the acquisition of MGG, as you know, we’re also considering the partnership with Natixis in the asset management. The focus will be on integration and execution of the plan.”
Asset Management
In asset management, Generali will continue to expand its investments, by focusing on private markets and real assets and strengthening its presence in core markets.
Generali, earlier this year signed a preliminary accord to combine its investment unit with Natixis Investment Managers and create Europe’s second-largest asset manager.
The insurer is joining other European investment firms in looking for acquisitions and partnerships to boost scale. Over the years, Generali has strengthened its presence abroad through a string of purchases, including Conning & Co., and New York-based credit investment firm MGG Investment Group.
The insurer plans to grow earnings per share by 8% to 10% annually and aims to generate over €11 billion of net cash flow over the plan horizon.
The board of directors decided not to compile its own list of candidates for election to the governing body, amid time constraints and regulatory uncertainty, it said in a separate statement.
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