Generali's turnaround strategy paying dividend

Italian insurer Generali posted a net profit of 1.92bn euros (US$2.67bn) for 2013, more than double the previous year's 94mn euros, and the highest annual profit for the group in six years, according to the firm's latest results release.

At the beginning of 2013 the group announced a turnaround strategy to withdraw from non-core businesses and optimize capital allocation to improve shareholder returns and maximize the value of its existing business.

The strategy appears to be paying dividend, literally, with Generali announcing plans to double its dividend to 0.45 euros a share from 0.20 euros.

For the fourth quarter alone net profit came in at 324mn euros, compared to a 1bn-euro loss in the same quarter of 2012.

Total income was marginally down to 85.0bn euros from 86.0bn euros the previous year, while net earned premiums were generally flat at 60.8bn euros.

"For the first time, after many years, our net result derives from our business operations rather than being impacted by one-off items," said the group.

Generali also said it has made significant progress towards its 2015 targets, with ROE of 12.1% climbing 80bps towards the 2015 target of 13%, and debt reduction of 500mn euros, improving the debt leverage ratio 80bps to 39.6% (approaching the 2015 target of 35%).