Generali's net profit beat expectations on the back of a strong performance by its key life insurance division even as a deadly earthquake in Northern Italy took its toll on the company's general insurance business. Unveiling its first set of results under new Chief Executive Mario Greco, Generali said its net profit had seen a "strong progression" in the second quarter. The company said it expected full-year operating profit, stable at 2.34 billion euros ($2.88 billion) in the first six months of the year, to improve on 2011. "Results seems rather good. Operating profit is ahead of expectations and the solvency ratio is also looking good," said an insurance analyst who declined to be named. Europe's third-largest insurer said first-half net profit rose 4.5 percent year-on-year to 842 million euros, ahead of a forecast of 810 million euros in a Reuters poll of 10 analysts. For the second quarter alone, net profit rose 44.5 percent to 274 million euros, according to a table published in a slide as part of the insurer's quarterly presentation. Shares in Generali rose as much as 1 percent in volatile early trading. By 0814 GMT they were down 0.3 percent, in line with the European insurance index down 0.4 percent. Generali said its combined ratio - costs plus claims as a percentage of revenues, a key profit indicator in the non-life sector - deteriorated to 97.1 pct from 96.5 pct a year ago on the back of the Emilia-Romagna earthquake. Generali put the negative impact of the quake and other catastrophic events at 222 million euros, resulting in a 6 percent fall to 755 million euros for non-life operating profit. Its solvency margin, a measure of an insurer's strength, stood at 130 percent at the end of June, up from 117 percent at the end of 2011. Greco, formerly at Swiss insurer Zurich, took over on Aug. 1 from long-standing CEO Giovanni Perissinotto, who was ousted after Mediobanca and other key shareholders expressed disappointment with his tenure at Generali. He is expected to refrain from outlining a detailed new strategy at a conference call with analysts on Thursday. The market is speculating that Greco may consider asset sales or even a capital increase as part of his new strategy. The euro zone crisis continues to cloud the outlook for the insurance sector and for Generali, whose main market - Italy - is struggling under a deep recession. The insurer, Italy's largest, also holds large volumes of sovereign bonds issued by critically-indebted Italy. Reuters
