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UPDATE 1-Generali to exit less profitable markets, sticks to 2018 targets
November 23, 2016 / 7:11 AM / in a year

UPDATE 1-Generali to exit less profitable markets, sticks to 2018 targets

(Recasts, adds detail, CEO)

MILAN, Nov 23 (Reuters) - Italy’s biggest insurer Generali stuck to its 2018 targets on Wednesday as it looks to leave unattractive markets and cut costs to boost profit and capital.

The insurer, which generates most of its revenue and earnings in Italy, France and Germany, said it would generate 1 billion euros ($1.06 billion) by 2018 by exiting less profitable markets.

It also said it would reduce operating costs by 200 million euros in mature markets over the 2016-19 period.

On Tuesday sources told Reuters that Generali was considering shedding up to 8,000 jobs outside of Italy.

“Our goal is leadership in our chosen markets, not measured by size but by profitability,” CEO Philippe Donnet said.

Europe’s third-largest insurer confirmed it would generate more than 7 billion euros in cash by 2018 and distribute more than 5 billion euros in dividends.

Persistently low interest rates in Europe are pressuring insurers’ investment income and many companies are seeking to offset this through improved product design and efficiency.

Generali said it aims to change the business mix of its life operations by shifting to more capital-light products.

Compared with its main rivals the Italian insurer is more focused on traditional life products and less on unit-linked or index-linked policies. ($1 = 0.9398 euros) (Reporting by Stephen Jewkes; Editing by Agnieszka Flak and David Goodman)

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