Group net profit was â‚¬ 51 million (â‚¬ 724 million in the first half of 2001). The significant fall in the net result was due to the negative effects of financial markets, which brought about major write-downs of â‚¬1,545 million of the equity portfolio.
The full impact of this fell on the first half profit and loss account reflecting the application of Italian accounting principles rather than impacting for the most part shareholders funds as would be the case under international principles. The same effects arising from the downturn of global stock markets have also resulted in a significant reduction in realised gains from trading activities and lower extraordinary gains.
The insurance sector felt the effects of the fall in consumer spending due to the economic crisis in all the major European economies. Notwithstanding this, the Groupâ€™s overall gross premium income in the first half of 2002 increased by 6% (on homogenous terms) to â‚¬ 23,833 million. In the life business, premium income rose to â‚¬ 14,223 million (+6.4%), while in non-life it increased to â‚¬ 9,610 million (+5.4%).
Investment income amounted to â‚¬ 5,774 million (â‚¬ 6,801 million in the corresponding period last year).
Realised gains from trading amounted to â‚¬ 514 million (compared to â‚¬ 1,122 million in the first half of 2001). Realised gains from the sale of other investments amounted to â‚¬ 199 million (â‚¬ 267.5 million in the first half of 2001). Net realised losses amounted to â‚¬ 1,602 million. At the end of the period, unrealised gains on listed securities amounted to â‚¬ 3,789 million (â‚¬ 6,377 million at year-end 2001).
The operating environment in the first half of the year was a particularly difficult one for the insurance business and above all for financial operations. Notwithstanding these difficulties, the Group continued to see an improvement in the fundamentals of its core business. After June 30, insurance business continued in line with expectations. In August, Generaliâ€™s total exposure to the serious floods in central Europe amounted to approximately â‚¬ 90 million, net of reinsurance.
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