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Generali Reports Fourth-Quarter Loss After Writedowns Increase

Assicurazioni Generali SpA (UCG), Italy’s biggest insurer, reported a loss for the fourth quarter after 1.3 billion euros ($1.7 billion) of writedowns on equity holdings, including a stake in Telecom Italia SpA. (TIT)

The net loss of 1.04 billion euros compared with a profit of 31 million euros a year earlier, the Trieste, Italy-based insurer said in a statement today. The average estimate of six analysts surveyed by Bloomberg was for a loss of 203 million euros. Generali kept its dividend unchanged at 20 cents a share.

“The impairments follow the completion of the prudent and detailed asset review and incorporate the impact of the group’s decision to align its impairment criteria with international best practice,” the company said in the statement. The firm took a 148 million-euro writedown on Telecom Italia stake and 792 million euros on assets available for sale, it said.

Chief Executive Officer Mario Greco, who took over in August, is seeking to convince investors he can revive profit and boost capital by cutting costs, selling non-strategic assets and targeting faster-growing emerging markets. The company is selling its U.S. life reinsurance business and Swiss asset- management unit BSI Group as part of a plan approved in January.

Fourth-quarter operating income rose 12 percent to 928 million euros from a year earlier, boosted by the non-life insurance segment. Non-life operating profit rose 41 percent to 505 million euros in the quarter. Operating income at its life business declined to 462 million euros from 564 million euros.

Generali’s solvency ratio, a measure of an insurer’s capacity to absorb losses, rose to 150 percent as of Dec. 31 from 140 percent at the end of September.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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