Operator: Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Generali 2019 Nine Months Results Conference Call. As a reminder, all participants are in a listen-only mode. After the presentation, there will be opportunity to ask a question.

[Operator Instructions] At this time, I would like to turn the conference over to Ms. Giulia Raffo, Head of Investor & Rating Agency Relations. Please go ahead madam.

Giulia Raffo: Thank you very much. Good morning, everyone and welcome to Generali nine months 2019 results conference call.

I'm here with our General Manager, Frédéric de Courtois; and with our Group CFO, Cristiano Borean. Without further introduction we would like to open the Q&A session. Thank you very much.

Peter Eliot: My first question was just the usual ones. I'm trying to get just a little bit more detail behind the numbers, if possible.

And I was just wondering, if as usual you could give us the split of runoff gains and expense ratio within the combined ratio and also if you could spell out the moving parts of the Solvency walk in Q3 And then secondly, one of your competitors this morning but just wondering if you could share any thoughts you have on the impact of EIOPA's review. It looks to me like you could see quite some material benefit under some of its proposals for changing the VA beyond just the country the eight proposals but interested to hear your thoughts on the matter? Thank you.

Cristiano Borean: Hi, Peter. So split of expense ratio you have a movement of the expense ratio which is on nine months – over nine months increasing 0.4%, which is mainly the effect of an increasing of the cost acquisition 0.6% because of the expenses of acquisition of the non-motor business which we are steering to growth for and a reduction of 0.2% in the administration cost thanks to our tight cost control. On the movement of the third quarter solvency, I would first would like to comment that basically you have mainly four percentage points of capital generation and these are – and the holding part.

And these are counterbalanced by four percentage points capital movement, which includes also the effect of our liability management exercise we did as you know by – in the end of September and we account for already in this presentation. There are something like three percentage points of market variances and another two points of other – truly the 2% or 4%.

Peter Eliot: Okay. So, if it's not being cheeky would it be possible to split out the market variances in terms of interest rates and BTP? And also I was wondering, could we have the runoff gains within the combined ratio? Thank you. Frédéric

de Courtois: Okay.

So Peter, this is Frédéric. I complete on the loss ratio and the combined. So as mentioned by Cristiano our combined – the improvement of our combined by 0.3 points is explained by the deterioration of the expense ratio by 0.4 points and an improvement of the loss ratio by 0.7 points. Out of the minus 0.7 points of the loss ratio we have less runoff so by 0.6 points; we have a slight deterioration of cat by 0.3 points; and we have a significant improvement of the current year attritional loss by 1.6 points, which is I think the interesting trend, because this is a trend that we already had over last year, and that we still have on our figure and which is probably linked to our strong technical excellence initiatives. So the – we see a strong decrease of our attritional currency loss ratio.

Before giving the word to Cristiano on the solvency again, let me comment on the comment from EIOPA. So you know that first we have this draft from EIOPA. There are two big topics, I would say. The first one is the topic of the last repeats points. Very difficult to know at this stage, but my only comment is that due to our geographical mix and our business mix we are much less impacted by this topic compared to our peers.

And the second big topic is obviously the volatility adjustment. But as you know we have no clear proposal on the table so we are still very much at the stage of a lot of various scenarios. So I wouldn't comment on fees at this stage. Cristiano, on the solvency?

Cristiano Borean: Yes. To complete Peter, let's say the net effect between the decrease of the government spread especially BTP and the decrease of the interest rate is net two percentage point decrease.

My comment would like to be – to focus more on the fact that the BTP tightening was less pronounced in the 15-year bucket than in the 10-year bucket. And this clearly has when you evaluate an impact, which is exactly the opposite, if you look at the 15-year swap movement on the flattening part of the curve. So you have also this let's say non-linear parallel effect in your understanding of destination.

Peter Eliot: That's great. I hope you don't mind me asking a very quick follow-up on that because obviously the sensitivities you give at the parallel shift and we can do the work very, very thoroughly or we can take a point estimate it sounds like you're saying 15 years it's probably the best point to use if we want to have sort of quick and dirty asset.

Would that be about right?

Cristiano Borean: Given the structure of our liabilities in Life it is more consistent to focus on there.

Peter Eliot: Great. Thank you very much.

Operator: The next question is from Farooq Hanif with Credit Suisse.

Farooq Hanif: Hi, there.

Thank you very much. Just quickly on the Life new business mix. I mean, the margin decline is quite low in U.S. profit. I was just wondering whether you're seeing a further increase in protection and unit-linked business and whether you can comment on that.

And secondly clearly you could see a material decline in investment yield now particularly in Italy in your P&C business. Is there some easy metric you can think of in terms of the basis point decline per year roughly to model that? Thank you. Frédéric Marie

de Courtois: Hi, Farooq. So on the – yes you can see it on the NBV. So the NBV margin is resisting well which is due to a very good increase on protection better third quarter on unit-linked and the fact that we continue to roll out the strategy that we have already explained on the fact that our – especially in Italy our general account are now lighter and lighter because we've moved to maturity guarantees.

Then, if you ask me why do we have a significant increase on protection my only good answer is that this is really our strategy to develop protection in other countries so mainly Europe and Asia. And that – the fact that we have proprietary channels helped us on this because they are well aligned with the company's strategy.

Farooq Hanif: Can I just quickly on protection if I may? When you say protection is the majority of this business a rider is it mortality or is there quite a lot of health?
Frédéric Marie

de Courtois: So in – as you know the business in Asia is mainly about riders and the business in Europe is as a majority standalone business. You have also riders because the majority is standalone business.

Farooq Hanif: Okay.

Thank you.

Operator: The next question is from Nick Holmes with Societe Generale. Please go ahead.

Nick Holmes: Hi, guys. Thanks very much.

Just one question. Just wanted to ask if you can give us an update on pricing in the internal niche market. Are you seeing price stabilization do you think?

Cristiano Borean: Sorry, I need first to answer Farooq, which I don't know why the operator skipped the answer. So the reinvestment yield in P&C, first, let me say and repeat what we said last time, the amount of money to be reinvested in P&C is very limited in the next three years coming from the structure of our collection and the structure of our fixed income portfolio. And this is visible also in the third quarter, but there was a very small amount of reinvestment to be down one-third compared to last year, if you are to keep in mind this.

So the strategy is to keep a reinvestment yield, which is sufficiently in line with some drops going forward of some tens of bps, but you should not expect a huge effect due to the fact that the portfolio to be reinvested is very small.

Farooq Hanif: Thank you for the record. Thank you.

Operator: The next question is from Nick Holmes with Societe Generale.

Nick Holmes: Hi, guys.

Yeah. Thanks very much. Just one question. I wonder could you update us on pricing in the Italian motor market? Just wondered if you think finally we're getting to price stabilization. Frédéric

de Courtois: So, Italian motor market's combined ratio is continuing to improve.

As far as prices are concerned, I would say stabilization may be slightly up in the market, which is still competitive. But the fact that -- again that we have rolled out or take technical excellence initiatives have led to better combined ratio on the motor. So no -- on the trend on the prices, no big changes compared to what we have discussed during the last period, so stable to slightly up.

Nick Holmes: That's great. And can you share the combined ratio with us again for Italian motor?
Frédéric

de Courtois: Nick, sorry, we don't share this information per quarter.

We only discuss at year-end.

Nick Holmes: Okay. Yeah. Sure. Sure.

No problem. Thank you very much.

Operator: The next question is from Ashik Musaddi with JPMorgan. Please go ahead.

Ashik Musaddi: Hi.

Good afternoon everyone. Just a few questions. First of all is around the number that there is some consolidation number in the P&L and operating profit that improved materially year-on-year. So what's going there? Any thoughts on that? Secondly is, can you walk us through the operating profit to the group net profit number just what are the key elements there? Any thoughts on that? And thirdly if I understand correctly, you did a bit of re-risking of your assets in third quarter. As a result there was a bit of a drag on solvency ratio.

What was that re-risking in which particular asset class? Any thoughts on that would be great. Thank you.

Cristiano Borean: Hi, Ashik. So let's start with consolidation adjustment. First of all, in the quarter you have two effects.

One is related to the IFRS 5 companies like Generali Leben, which last year we are putting this category where there was some interrelation among the company and the group, which were netting out. And now we will not have this effect of consolidation adjustment the negative part going forward. And this will be stabilized with the year-end. And this is -- in a sense, it's not recurring, because it will not be there. Then there is a one-off effect of a realization of intra-group bond losses, which has been consolidated out positively on the other side, but this effect is not an effect, which is recurrent.

So on the about €30 million difference between third quarter 2018 and third quarter 2019 of consolidation adjustment you have about half of this coming from the recurring and half coming from this effect. Second point, regarding the walk from operating to net what are the key elements? Well, first of all, in the effect of investment non-operating result, there are still some impairments of around €200 million before taxes, which is consistent to what I told you last time of our rules of once impaired always impaired; and the 12-months rule which is applied under our IFRS accounting rules. Then we have an improvement on the non-operating of the expenses, because of the interest rate debt where you see is like more than €30 million improvement. And then we have basically the same level of in absolute number on taxes, which brings you -- taking into account the discontinued operation of the €475 million coming from mainly the capital gain from the sale of Generali Belgium for €128 million and the gain coming from the sale of Generali Leben for €352 million brings you basically there apart for the -- the result of the previous Generali Leben. And then on the minorities, you get the €200 million minorities.

These are the major drivers for the operating to effect. Then I would like to recall that within the non-operating investments when you go on the final net result, you have to account the €188 million of liability management, which we communicated also in the press release. And it is accounted in the non-operating investment result. I hope I gave you clarity on this point.

Ashik Musaddi: Yeah.

Very clear.

Cristiano Borean: On the re-risking in our asset, first of all, the re-risking is completely consistent with our Generali 2021 strategy in the investment, which brings us the increase in the real assets like private debt private equity infrastructure. What is important to be understood, it is clearly that depending on the level of interest rate as of today, the capital intensity of this investment is different, so it's higher. And the impact on the solvency was in the order of one percentage point of solvency for the quarter.

Ashik Musaddi: Okay.

Very clear. Thank you. Thanks for the detail explanation.

Operator: The next question is from Niccolò Dalla Palma with Exane BNP Paribas. Please go ahead.

Niccolò

Dalla Palma: Hi. Good afternoon everyone. I have one question on the Life new business mainly, where you mentioned the futures of new products the sort of recalibration of financial guarantees and you gave just now the example of the at-maturity guarantees. Is there any other important changes you are making? I think you have been vocal in France about the changes. Are there any practical examples that you can give us of significant changes to products across the business maybe also in Germany?
Frédéric

de Courtois: Hi, Niccolò.

This is Frédéric. So, yes, you are right. We've been very vocal in France and I think we've been right to do this. And by the way we've been followed by the market. So we are in France, of course, like, every other market we are strongly developing protection, but the big change will be on the savings part.

So we are much -- even more -- much more focused than before on its needs. And we will be much more focused than before on euro croissance. You know that the euro croissance is the equivalent of what I call the maturity guarantee in Italy. So euro croissance you have -- you also have a maturity guarantee. You also have the possibility to guarantee less than 100%, so 80% or 90%.

And you know that the French government has -- or is currently simplifying the euro croissance, which will probably help to boost the volumes in 2020. So euro croissance is and probably will be a good alternative in France. So in fees, we are also doing all what we can to disincentivize general account in France. We recognize that the general account will remain in our product range, but we also recognize that the -- what was paid by the markets on the general account product was not sustainable, so we will decrease the payout on general accounts. And we are obviously ready to have net outflows in general accounts, so we are clearly focused on margins and fees.

Cristiano Borean: So it is Cristiano. Just to follow-up on the previous answer to clarify the €188 million of net result impact of liability management is net result so after tax. The pretax impact there was €245 million, just to have everybody on the same page. Frédéric

de Courtois: And if I may complement my answer to Niccolò because I realized that you were also asking about Germany. But Germany is not really an issue for us.

Not only on the in force as you know after the sale of Generali Leben, but also because our new business is extremely strongly focused on unit-linked and protection, so usually what we sell in Germany are bundled products with various guarantees. And the general account part is extremely small and most of the new fees are unit-linked and protection, so we don't see an incentive to have strong changes on fees. And I would say unlike the market because the market is still very much focused on general account in Germany.

Operator: The next question is from Elena Perini with Banca IMI. Please go ahead.

Elena Perini: Yes. Good afternoon. I've got only one question and it is about your growth. You still have more than €3 billion to be potentially used for acquisitions. And in particular, you stated to be interested in P&C and asset management.

Can we expect something new after Portugal on this side? Are you working on this? And do you have any updates? Thank you very much. Frédéric

de Courtois: Thank you, Elena. This is Frédéric. What I can tell you on fees is that our strategy is unchanged. So we are still -- we still have money to be reinvested if there are good opportunities.

We -- as you said we are interested in P&C asset management also in protection and health. And again, we need to be very disciplined. I mean, we are aware that we are probably at the end of a cycle, so we are aware that the opportunities are not cheap. So we need to be even more disciplined than before on prices and conditions.

Elena Perini: Okay.

Thank you.

Operator: The next question is from James Shuck with Citi. Please go ahead.

James Shuck: Hello. Good afternoon everybody.

So I'm going to try and ask this question, but I'm not sure what kind of answer I'm going to get, but I'll give it a go. We might well be seeing the newness [ph] of the various cross-shareholdings in Italy. There's a few things happening in terms of stakes at various companies changing and some of the families changing their exposures in certain areas. To the extent you can comment on that, I'd welcome any comments that you might be able to give in terms of how you see that evolving over the medium term. So a semi-linked question, if capital wasn't an issue for you i.e.

the €3 billion you got available for acquisitions as that was suddenly a much bigger number, how do you think you could accelerate your expansion in Europe? Thank you. Frédéric

de Courtois: Hi, James, first sorry for this but I will disappoint you on your first question. I will not comment on the cross-shareholding in Italy. And we know that we have the rule to never comment on our shareholders, so I have no specific comment on this. Then on acquisitions, so yes, we've talked about €3 billion to €4 billion.

We -- to complement the answer I've given before, we especially like acquisitions with synergies. So we have a specific focus on Europe. Not only on Europe you know that we have -- we are in a limited number of markets in Asia and Latin America. We like also the Assistance business for instance. But -- so if we are going to buy something in Europe I cannot answer and I don't know.

But we like Europe. We are the market leader in Europe and we like synergies, which we have in Europe.

James Shuck: I guess, I'd take the point on the cross-shareholdings, so I thought I'd try. But I mean just in Europe, I mean, are you seeing assets come to market at the moment? And are the mutuals and things looking at demutualizing other companies looking to sell off parts of their businesses? I guess if €3 billion -- if there's an opportunity that came along that was more opportunistic and you wanted to do more than €3 billion would you consider that?
Frédéric

de Courtois: So first, we believe that there will be opportunities because there have 4,000 insurers in Europe. And we believe that some of them will be heavily impacted by interest rates.

So we believe that there will be a trend of consolidation. Then I'm not sure if I have understood your question about demutualization. I don't know what you are referring to.

James Shuck: So just mutual companies with -- coming on the solvency stress and business models that don't work in the digital age may be looking to sell off parts of their businesses. Frédéric

de Courtois: So again we will see.

There are good mutualize -- demutualizing. This is maybe an opportunity. But more globally, again I think that -- and we see that some of the insurance companies in Europe mutuals or not will be heavily impacted by the low interest rate. And yes, it may be lead to opportunity.

James Shuck: Yeah.

Okay. Thank you very much.

Operator: [Operator Instructions] Ms. Raffo, gentlemen, there are no more questions registered at this time.

Giulia Raffo: Thank you very much.

If that is the case, I believe we can conclude our conference call. As always, the IR team will be at your disposal for any follow-up question that you might have. And as far as the activities are concerned, we will be having our next conference call in March 2020 for our full year results. Thank you very much. Have a good day.

Bye-bye.

Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.