Italian insurer Generali has unveiled a fresh push into the asset management world, with a new plan to more than treble the profits it makes from the business.
The company said on Wednesday that it plans to increase profits from asset management, from €84m last year to €300m by 2020, and increase assets under management by a tenth to €500bn.
Generali, which earlier this year rebuffed takeover interest from Italian bank Intesa Sanpaolo, said it would recruit new specialist staff and would aim to win new business from other insurance companies. It wants to create what it calls: “the largest European multi-boutique insurance asset management platform”.
The push into asset management comes despite tough conditions in the industry. Fees are under pressure across the board as clients shift their money to low cost passive managers. Other insurers have been forced to take a tighter hold on their asset management businesses in recent years – Allianz had to intervene to sort out management problems at Pimco, while last week Axa replaced the senior management and most of the board at AllianceBernstein.
Tim Ryan, Generali’s chief investment officer said:
With our current AuM of nearly €450bn in Europe, we have a unique opportunity to internalize the management of a greater part of our existing assets and optimize our operations to lower costs. We will build an attractive multi-boutique platform bringing together existing and new, highly-specialized investment skills that will benefit from a strong centralized platform.
Generali has also released its first quarter results. Operating profits rose 4 per cent to €1.2bn as growth in life insurance was offset by a weaker result from property & casualty insurance, which suffered from €55bn of natural catastrophe claims.