Major insurer Generali aims to improve operations and boost profit by exiting from weaker markets and slashing costs.
The Italian insurance powerhouse revealed on Wednesday that it was reviewing its operations in 13 to 15 countries,
Reuters reported. The company said it will optimise its geographical presence by focusing on strong and profitable areas.
Generali said it will leave less profitable markets in order to “increase operational efficiency, improve capital allocation and mitigate risks.” The rationalisation process is expected to generate at least €1 billion by 2018, starting with the previous disposal of businesses in Guatemala and Lichtenstein.
In mature markets, Generali will restructure and simplify operations to reduce costs by €200 million. The insurer will eliminate duplicate and overlapping products, systems and processes.
In growth markets, the company is looking to make investments to expand the business.
“Our goal is leadership in our chosen markets, not measured by size but by profitability. We will further improve our operating performance and will create long term value,” said Generali Group CEO Philippe Donnet.
“We’ll improve our efficiency through significant productivity gains and we will optimise our geographical footprint, while securing investments in key growth markets,” he added.
Following reports of potential job losses, Donnet denied that the company was considering laying off 8,000 workers outside Italy.
“This number does not exist... there are no redundancies or restructuring plans,”
Reuters quoted Donnet as saying.
However, according to the news agency, Donnet later told analysts that the global workforce could be reduced in coming years through slower hiring and streamlining plans.
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