Unipol Assicurazioni S.p.A. (UNI) Earnings Call Transcript

Good afternoon. I'm the conference operator from Chorus Call. Welcome, and thank you for being with us on the Unipol call covering consolidated results at June 30th 2026. Just a reminder that everyone attending is in listen-only mode. Following the presentation, there will be a chance for you to ask questions. If anyone requires assistance at any point during this call, you can signal an operator by pressing * and 0 on your telephone. At this point, I'd like to hand the conference over to Mr. Matteo Laterza, CEO of Unipol. Please go ahead, sir.

Good morning, and thank you very much for being with us on this call. Before we open things up for questions, as we normally do, I'd like to share a few comments about the first-half figures that were released this morning. Those figures confirm how strong, resilient, and consistent our business model is. We managed to post excellent results on every key metric, with net profit coming in at more than 900 million, an increase of almost 50% year-on-year. Even more significant, the results show not only very strong earnings growth but also a meaningful gain in the quality of those earnings. Our performance rests on, and is supported by, all the core drivers of value creation: technical profitability in non-life, profitable growth in life, and resilient recurring investment income along with strong capital generation. What I'd especially like to highlight is our capacity to combine business growth with improving profitability in non-life — premiums rose by almost 4%, while the combined ratio improved to under 92%, which let us reach the target originally envisaged for the end of the strategic plan ahead of schedule. That is a particularly important achievement, since it shows that growth has not come at the expense of underwriting discipline. Quite the opposite — the quality of our portfolio keeps getting better.

That outcome looks even stronger when you factor in the conditions we operated under. Relative to the first six months of this year, nat cat hit us harder, though that was balanced out by a smaller large-loss impact. Taken together, those two effects land pretty much where 2025's figures sit, and they align very closely with what our budget and industrial plan assume and expect. The Life segment is doing really well too. We posted robust premium growth, net inflows in positive territory at nearly 800 million, and a meaningful lift in profitability. Both the technical side of the business and investment income are fueling this earnings rebound, and improving portfolio economics keep underpinning profitability going forward. Last, investment results were excellent regardless of the SpaceX IPO, which is a one-off element within investment income — yet even setting SpaceX aside, the portfolio's investment yield stands at roughly 6%, which is highly robust, meaningful, and sustained when it comes to the contribution from dividends and coupons. On top of that, our capital position stays a core competitive edge. We ended the first half at a Solvency II ratio of 259%, which is the official figure, but as always I want to stress and highlight how much the 290% matters — the solvency level of the insurance group — a really strong number that clears the path to staying fully consistent with our metrics and our dividend distribution policy target which, as I mentioned the last time we spoke, rests on the 930 million expected dividend for 2026 and clears the path for dividend capacity through the remainder of the industrial plan and broadly for what lies ahead.

That said, as always, I'm joined by Enrico San Pietro, and we're ready to take your questions. Many thanks.

This is the Chorus Call conference operator. We'll now start the question and answer session. If you'd like to ask a question, you can press * and 1 on your touchtone telephone. To take yourself out of the question queue, please press * and 2. Please pick up the receiver when asking questions. Anyone who has a question may press * and 1 at this time. The first question comes from Tommaso Nieddu with Kepler Cheuvreux. Please go ahead.

Hi, and thanks very much for taking my questions. My first one concerns net financial results and the underlying yield — in particular, I'm not referring to the SpaceX MTM. On that underlying yield, across both life and non-life, the return has been extremely strong. I'd just like to get a sense of the run rate we should be expecting for H2. My second question is about the health business. Profitability there is obviously still outstanding, but growth appears to have been slowing over the first two quarters relative to last year. Should we look for a reacceleration in the coming quarters, or could you give some color on why that wouldn't happen? Thank you.

On your first question, if we set aside the SpaceX mark to market — which, as I mentioned earlier, is an exceptional item, highly volatile, and stems from an investment we made in the past that proved very worthwhile given how the mark to market valuation of SpaceX stock has evolved — that is not a strategic stake, and we will look for the opportunity to divest the investment as soon as market conditions allow it. Setting SpaceX aside, as I said earlier, the overall investment yield for P&C and life not related to the segregated portfolio, gestioni separate, is 6%. The running rate — the component tied to coupon and dividend — is 5%, because 1% is the component linked to mark to market evaluation of assets that are marked to market through P&L. If you want to consider and extrapolate the investment income for the second half, if you want to be prudent, you should consider only the 5% I mentioned earlier. Bear in mind that this 5% includes an important contribution coming from the equity investment. Dividends are allocated in the first half of the year, and so you can't expect a replication of the dividend stream coming in the second half of the year.

If you take out the dividend piece from the run rate, you'd land at roughly 4% as a way to gauge what the investment adds in the second half of the year. Naturally, there's also the mark to market on the assets recorded through P&L, which will contribute based on how financial markets perform in that same second half. The next question concerns the health business. One thing to keep in mind is how premiums trended—they were somewhat muted in the first half of the year, since bancassurance and agent results were really strong, yet as a share of total premium those two components still don't make up most of the company's premium. Corporate is the largest piece—the big contracts we hold with large institutions—and it grew at a mid-single digit rate in the first half of the year. We anticipate an acceleration in the second half of the year, reflecting the potential acquisition of new contracts. On profitability, it was very strong, and we expect that trend to continue across the industrial plan's horizon—meaning the second half of 2026 and 2027.

Thanks.

Our following question is from Michael Huttner at Berenberg. Go right ahead.

Thanks a lot. I hope I’m coming through clearly. Sorry — I had just turned off my ventilator. Congratulations on the fantastic results. I had 2 questions, and they’re partly prompted by hearing your competitor a little earlier. The first is about nat cats. Could you discuss what you’re seeing in July, perhaps? The second concerns the underlying trends in non-life and the balance between inflation, if there is any, and pricing — and what you plan to do on pricing going forward? Thank you.

Hi, Michael — I'm Enrico. My first question concerns the nat cat events. As you've seen, during the first half the total level of nat cat losses wasn't worrying, at roughly 150 million. Then in July — as occurred in Italy, France, Germany, and Switzerland between 15 and 20 July — a number of convective storms hit. By our estimate, this could have an impact that is, of course, fairly significant, yet still not worrying relative to what we included in our budget, in our plan. Within the plan, the total figure we anticipate for nat cat events — both on motor other damages and property — comes to around €550 million, and we believe we are on track to remain at that amount or below it. The second question relates to the underwriting underlying trends in non-life broadly. Of course, where motor third-party liability is concerned, price momentum across the market is declining, and the same holds true for us. The price increase is smaller than a year earlier, in the region of 2%. As you've seen in the first half, the motor combined ratio has worsened slightly, but motor third-party liability sits at exactly the same combined ratio level, and the deterioration is tied to nat cat events on motor other damages.

For the motor side of things, non-motor has turned into a fairly profitable area for the market. Naturally, that means pricing momentum is shifting, and in certain lines — general third-party liability being one example — the entire market is cutting back on premium volume. That happens, naturally, because after a stretch of years in which general third-party liability was a rather troubled line of business, it has now become genuinely profitable, so the market has softened, prices are coming down, and naturally the total premium written is falling too. The same holds for us. As you can see, the line of business that wasn't growing is general third-party liability.

That's very clear. Thank you.

Our following question is from Antonio Gianfrancesco at Intermonte. Go ahead, please.

Yes, hello, and thanks for taking my questions. There are three of them. The first concerns the agreement with Intesa Sanpaolo regarding the purchase of the Banca Monte dei Paschi carve-out, since I was hoping you might help us grasp just how firm that Intesa agreement stands at this point. Were Intesa to change the terms of its offer on Monte dei Paschi, ought we to take it that the terms between Intesa and Unipol concerning the Monte Paschi carve-out are entirely locked, or might there be some risk of shifts in price, perimeter, or another condition that could prove less favorable for Unipol? The second is about the dividend policy, as I was hoping you could offer a little more color on that policy following the very strong capital generation you delivered in the first half. You have already produced 300 million of excess capital during this first half, on top of the half billion in full year '25. With the approval of the capital increase and the resulting larger number of shares, should we view your ambition as managing a stable or growing DPS year after year, including '26 on '25 and '27 on '26, and that even before the first of the synergies from the BPER-Monte dei Paschi combination begin to be visible?

The third and final question concerns corporate structure, since I was wondering whether you could offer a qualitative view of how you think about the medium-to-long-term corporate structure, because in theory, once the BPER and Monte Paschi carve-out have been combined, a bank-led holding inversion might be a route to better capital efficiency. In such a case, obviously, given the current shareholder situation, let's say this move could be dilutive for the existing main shareholders of Unipol, and it would also leave the financial conglomerate exposed to takeover risk. Do you believe the more realistic path is first to progressively raise the stake in the combined bank over several years before any structural change could be contemplated? Thank you. Thank you.

Thanks for that. On the first question, about the agreement with Intesa Sanpaolo that we disclosed during the conference call in early June: the agreement, of course, stays the same. As we said previously, we have a cap on the acquisition of the carve-out of 3.5 billion. Once that cap is reached, the cap protects us, so whatever decision Intesa Sanpaolo makes in the offer will follow what the agreement sets out. That means we will pay half of the multiple that Intesa Sanpaolo pays for Monte dei Paschi, capped at 3.5 billion. That is the point. On the dividend policy, we have a new floor of 930 million — that was 800 million, which we disclosed before, taking into account the capital increase that we think we can carry out by the end of the year — and this will be the floor going forward. That said, we also gave some figures for the net profit we could achieve once we become, hopefully, a conglomerate by taking control of Monte dei Paschi and BPER and combining them, with control of BPER, with total profitability close to 2 billion.

You can run the numbers to figure out what dividend policy we might put in place going forward, taking 930 million as the floor. On the third question, as you rightly noted, our aim in the near term is to carry out the transaction we announced at the start of June — meaning building a large financial conglomerate whose insurance arm and banking arm each contribute the same in terms of profitability. Our ambition is to hold a stake of more than 30% in the new financial entity, and after that, depending on how much capital we can generate, we hope over time to raise that stake if we have the capital available to do so. As a result, any chance of a reverse merger is not on the table as of today, because, as you rightly noted, it would alter the company's shareholder structure rather radically, and that is a decision for the company's shareholders — it is the shareholder meeting that must make that kind of decision. It is entirely premature to consider such a possibility.

That’s very clear. Thanks.

Andrea Lisi from Equita has the next question. Go ahead, please. Hey,