Generali's Strategic Momentum and Capital Allocation Discipline in 2025: A Blueprint for Long-Term Value Creation

In the ever-evolving landscape of global insurance and asset management, Generali Group has emerged as a standout performer in 2025, leveraging its strategic vision and disciplined capital allocation to deliver robust operating results and shareholder value. With a clear focus on profitability, capital efficiency, and stakeholder returns, the Italian multinational is positioning itself as a compelling long-term investment.

Operating Momentum: A Tri-Segment Engine of Growth

Generali's first-half 2025 results underscore its ability to execute across its core business lines. The Property & Casualty (P&C) segment delivered an operating result of €2.0 billion, a 18.4% year-over-year increase, driven by a tightened Combined Ratio of 91.0% and 7.6% growth in gross written premiums. This performance reflects disciplined underwriting and cost control, particularly in motor and non-motor lines across key markets like Europe and Latin America.

The Life segment, while facing a 2.6% decline in gross written premiums, demonstrated resilience through strong net inflows of €6.3 billion (+25.2%) and a 5.12% New Business Margin. This was fueled by high-margin protection and health products, as well as hybrid and unit-linked offerings. Meanwhile, the Asset & Wealth Management (AWM) segment contributed €560 million in operating results, buoyed by a 11.7% growth in asset management revenues and the integration of Conning Holdings Limited.

These results are not isolated but part of a broader trend: Generali's operating result for the first half of 2025 reached €4.0 billion, an 8.7% increase year-over-year, with a Solvency Ratio of 212%—a testament to its capital resilience.

Capital Allocation: A Shareholder-Friendly Framework

Generali's 2025 capital strategy is a masterclass in balancing growth and returns. The Group has committed to a dividend per share of €1.43, an 11.7% increase from 2024, aligning with its target of over 10% annual dividend growth through 2027. This ratchet policy is underpinned by a €500 million share buy-back program launched in August 2025, which builds on a €500 million initiative in 2024. Over the 2025–2027 period, Generali plans to repurchase at least €1.5 billion in shares, directly enhancing earnings per share (EPS) and shareholder equity metrics.

The rationale is clear: by reducing share count, Generali amplifies EPS growth, which is a key driver of long-term value. For instance, the 2025 buy-back is expected to contribute to an 8–10% compound annual growth rate (CAGR) in EPS, a target embedded in its “Lifetime Partner 27: Driving Excellence” strategic plan. This approach mirrors broader industry trends where buybacks are increasingly used to reward shareholders while maintaining capital flexibility.

Strategic Resilience and Future Outlook

Generali's capital discipline is further reinforced by its ability to navigate macroeconomic headwinds. Despite inflationary pressures in Argentina and regulatory changes, the Group maintained a Solvency Ratio of 210% as of March 2025, supported by normalized capital generation of €2.3 billion. This stability allows for aggressive shareholder returns without compromising operational resilience.

Looking ahead, Generali's strategic priorities—customer-centric innovation, operational excellence, and capital efficiency—are poised to drive cumulative cash generation of over €11 billion and a dividend payout exceeding €7 billion through 2027. The integration of Conning Holdings and expansion in private and real assets also diversify revenue streams, reducing reliance on volatile markets.

Investment Thesis: A Compelling Long-Term Play

For investors seeking durable value creation, Generali offers a compelling case. Its operating momentum across all segments, coupled with a capital allocation framework that prioritizes shareholder returns, creates a virtuous cycle of growth and reinvestment. The €500 million buy-back program in 2025, combined with a 10%+ dividend growth trajectory, directly enhances equity value.

Moreover, Generali's Solvency Ratio of 212% provides a buffer against economic downturns, ensuring the company can sustain its initiatives even in adverse conditions. With a strategic plan targeting 8–10% EPS CAGR and a clear focus on profitability, Generali is not just adapting to market dynamics—it is shaping them.

Conclusion:
Generali's 2025 performance and capital allocation strategy exemplify the principles of long-term value investing. By aligning operational excellence with shareholder-friendly policies, the Group is building a foundation for sustained growth. For investors with a multi-year horizon, Generali represents a rare combination of disciplined execution, strategic foresight, and financial resilience—a rare trifecta in today's market.