Good afternoon. This is the press call conference operator. Welcome, and thank you for joining the Generali Group full year 2022 results presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Cleva, Head of Investor and Rating Agencies Relations. Please go ahead, sir.
Thank you, good afternoon, everybody. Welcome to Assicurazioni Generali full year 2022 results Q&A call. On the call today, there is our Group CEO, Philippe Donnet, our Group General Manager, Marco Sesana, and our Group CFO, Cristiano Borean. Before opening the Q&A session, let me hand it over to Philippe for some opening remarks. Philippe, the floor is yours.
Thank you, Fabio, and thanks to all of you for joining this call. Today, we published our full year financial results for 2022. They confirm our ability to achieve solid growth and execute our strategic plan in a year that was once again marked by extraordinary challenges, primarily the Russian invasion of Ukraine. The effects of the conflict have been widespread, from heightened geopolitical tensions to food and energy supply pressures and wider inflationary trends. In this environment, we maintain total focus on our successful transformation journey, which continues through the disciplined and effective execution of our Lifetime Partner 24: Driving Growth strategy. I would like to highlight five key messages.
First, the group achieved its best ever operating result of EUR 6.5 billion plus 11.2% versus full year 2021, with continued growth in terms of gross written premiums, which amounted to EUR 81.5 billion, and net result, which stood at EUR 2.9 billion. These results reflect the transformation of our business model, making the group more resilient with a focus on profitable and sustainable growth. Since 2015, our top line has grown by 10%. Our operating result today is 35% higher than our net result without considering Russian impairments is 55% higher. Sorry, 50% higher. Second, these results allow us to propose to our shareholders an increased dividend of EUR 1.16 per share, 8.4% higher compared to last year.
The growth in the dividend per share was made possible by the disciplined execution of our strategy and reflects our confident outlook underpinned by our strong cash and capital position. The group solvency ratio stands at an extremely strong 221% at the end of 2022. Thanks to a range of strategic actions and initiatives, the sensitivity of our solvency ratio to financial markets has substantially reduced during 2022, making us more resilient and better insulated. In particular, I would like to highlight that our sensitivity to a 100 basis points movement in the BTP spread has more than halved from 13 percentage points at year-end 2021 to 5 percentage points at year-end 2022. Third, we are well positioned to deliver the financial targets of our strategic plan. Two out of our three key financial targets are cash-based.
We are continuing to improve our cash generation, as reflected in the 11% growth in the net holding cash flow to EUR 2.9 billion. We have also fully maintained our disciplined, consistent and opportunistic approach to capital redeployment following a strict set of criteria. Financial discipline in capital deployment is a key component of our strategy, and we will only pursue opportunities that create value for all our stakeholders. Going forward, any dilutive impact from long-term incentive plans will be fully offset through share buybacks. Talking about targets, we also are making strong progress on our commitment to being a Lifetime Partner to our 69 million customers worldwide, and we are on track to meet our objectives in terms of customer loyalty.
Generali is the largest insurer in the European retail and SME segment, and in 2022, we worked relentlessly on client service, product simplification and customer satisfaction. I'm very pleased by the results, both in terms of relationship Net Promoter Score and multi-holding customer growth. The proximity to our customers, enabled by our strong distribution capabilities, is a key pillar of our strategy and a distinctive feature of Generali. Fourth, these results also reflect an effective inflation fighting program that we put in place to adapt to the new environment. A year ago, I discussed with you the need to raise tariffs on this front, I can tell you that there is a good momentum with prices gradually increasing during the year, and this growth is continuing in 2023.
We have been able to implement these measures while maintaining high client rotation ratios, showing the power of our brand and our effective distribution strategy. Beyond tariff, we also implemented cost savings and productivity improvement measures to further shield our business from rising inflation. This inflation fighting program demonstrates the Generali Group's ability to react quickly and decisively to a changing environment led by a united management team and executed with passion and commitment by all our colleagues in unique agent networks. Fifth and final, sustainability, the originator of our plan, has continued and continues to drive all of our actions as a responsible insurer, investor, employer, and corporate citizen. Following our efforts and our continued commitment to sustainability through tangible initiatives, I was very pleased when MSCI recently raised our ESG rating to the highest level at AAA .
In conclusion, today's results confirm the success of our Lifetime Partner 24: Driving Growth strategy. We will continue to update you on the progress of the plan in the upcoming months. We are now happy to take all your questions. Thank you very much.
Excuse me, this is of course call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touch tone telephone. To remove yourself from the question queue, please press star two. Please pick up the receiver when asking questions. The first question comes from David Barma of Bank of America.
Hello. Thank you for taking my questions. The first one is on the P&C top line, please. Your sales increased by about 10% in 2022. You flag a price effect of around 4%, I believe. Can you talk a little bit about the volume drivers for last year and how you see this mix of volume and price evolve in 2023, please? My second question is on Life earnings. The contribution from the Life businesses grew significantly in 2022. Can you help us understand the recurring parts of the strong results there, please? Lastly, on the holding, could you please update us on the total holding cash position and also on the cash flexibility levels at year-end? Thank you.
Thank you very much, David. Marco, I would say the first question on the top line growth, is for you. Cristiano, the question on Life earnings recurring versus non-recurring part, and the whole cash position, are both for you.
Yes. Hi, good morning. Talking about P&C, top line increase, I think you could see an 11% increase. I think it's a very strong increase in the top line, in particularly on non-motor. I want to remind you that this non-motor growth is the key of our target in the strategic plan. We actually highlighted at the beginning of the plan that this would have been our main focus, and this is coming so. We made a specific effort to increase the non-motor P&C top line. Discussing more broadly about the driver of volume increase, I think most of the volume increase that we see is driven by a change in average annual premium.
This is the main driver. Just to highlight what we shown is overall a 3.3% retail and SME, 6% in corporate and commercial. Overall, I would say this is really something that we are focusing on. I would stop here. This is really the main driver and what we see in the market. Regarding, this is an increase that we see going on for the next few months in the increase in average premium, both in non-motor and in motor.
Yes, David, regarding as Cristiano Life earnings, recurring partners versus non-recurring. First of all, let me recall you that, we are commenting the existing environment of IFRS 4, where the rule going forward, will change. I will explain why I'm saying this. Within the EUR 3.5 billion of Life operating result, you should account for something in between EUR 200 million-EUR 250 million of non-recurring elements.
Having said that, I would like to recall you what we said at the Investor Day of December regarding IFRS 17, telling you that, even though we are not disclosing today, and we will discuss the first quarter, the comparative, we told you that we were stable from above, so you should embed part of this also one-off when looking at the new way of seeing the operating result going forward in Life.
Third question regarding HoldCo cash position. As of year- end, the HoldCo cash was EUR 2.8 billion. It is composed by three layers. A first layer, which is something in the order of EUR 1 billion, which is the cash available for operations. As well, EUR 1 billion of a layer of extra prudency of cash buffer due to the uncertain volatility we are facing in the market. We are putting between the EUR 500 million to EUR 1 billion range of liquidity buffer. We put ourselves to the top end of that, like always when there is this kind of volatility. The last part, it is purely operating cash.
If I look at the end of February, which is before the dividend season, which we are starting getting from our subsidiaries in March, we were already at EUR 3.2 billion, thanks mainly to the operating cash, which is not the one you should consider available for operations, but the cash from the treasury operations there. Please be aware that within the EUR 2.8 billion of cash, compared to what you will see in the balance sheet, there are EUR 300 million short-term investment, which when they are more than 15 days, they are not accounted as cash in the balance sheet.
Next question, please.
The next question is from Peter Elliot of Kepler Cheuvreux.
Thank you very much, and congratulations on the very good results. Three questions from me, please. The first one, on the new business, in the slide commentary, you say that the new business margin has benefited from the higher interest rates, but the new business value has not. I was wondering if you could just clarify that for me, reconcile those statements. The second thing, on private equity, we were told to expect a catch up in the private equity dividend this year versus the result, but in fact it seems to have fallen further behind. I'm just wondering if that means we should expect a, you know, an even bigger catch up in 2023, or what we should expect going forward.
I appreciate the counting is changing, but I think it's sort of relevant even under IFRS 17 for everything bar the VFA model business. The third question, on the, you, I was interested that you say the VA reference portfolio changes are positive for you, which seems to be in contrast to others. I was just wondering why it's positive given that most of the weightings seem to have been reduced. Thank you very much.
Thank you very much, Peter. I say that the three questions are for Cristiano.
Hello, Peter. New business margin benefit from interest rate. Saying that the value has been positively affected by the higher interest rate environment, it is fair. On the present day new business premium, on the contrary, we have been negatively affected by the higher interest rate, because if you compare the PBNBP with the other old metric, sometimes, or other one used in the market, which is the Annual Premium Equivalent, the AP, the 12% drop we are observing in PBNBP is just a 7.9% drop in the Annual Premium Equivalent, which is mainly driven when you have some premium, like pension premium, longer one.
On the new business value and margin, there was a small effect of positive interest rate specifically in the saving and in some protection product. Second question relating private equity. Private equity, first of all, we had a slowdown in the dividend and especially in the result in the fourth quarter, as expected and anticipated in the ninth month call because of the delay of the managing partner of the private equity funds usually waiting for realizing the full value in this uncertain market. How to go and see going forward?
First of all, I hope, you, we all be happy that, we will treat private equity not anymore as a company, even though we have a company doing it, but, as an asset class. Starting from, the 2023 representation, private equity will be allocated, as an asset class investment in the Life. When the Life, business, which is, for the traditional business with profit, is, variable fee approach, VFA, that will be on to fully total return approach against the portfolio. On the other side, you know, by rule, IFRS 9 will ask private equity to be considered fair after value for profit and loss.
Notwithstanding this, for the component, which is, for example, in P&C as a dividend received, we will continue to account it as an operating result, while the fair value movement will be part of the non-operating component and will be netted out from what we call the adjusted net result going forward. Why we had a positive effect from an EIOPA reference portfolio compared to our peers? Well, this is mainly related. We had, I commented this morning to the press, we had a net-net 3 percentage point positive effect, which are the combination of 2 percentage point negative impact from the updated VA reference portfolio. There is a positive effect for us in Switzerland, stemming from the use of the reference curve and the last liquid point.
For the structure of our business, compared to other peers, eventually we have this positive effect.
Next question, please.
The next question is from Farooq Hanif of JPMorgan.
Hi there. Thank you so much. I didn't think I would ever ask this question, but would you consider increasing your debt now, given your great, you know, solvency to leverage, given your large value in force that you will have under IFRS? Is this something that you might use strategically to deliver your kind of capital deployment plans? Is question one. Question two, in your pricing data, thank you very much for that, by the way, you talk about average premium growth, and clearly there'll be an earned effect in 2022.
Can you just compare how this number compares with actual sort of pricing on renewals and on new business? And particularly I think around motor, where I think, you know, the number, it looks low, if you could comment on that? I guess finally, you know, the sharp outflows in savings business, I would've thought that in Italy, you know, the higher yield that you could potentially give your customers would be attractive, given that your capital position is, you know, quite strong. I just wondered, you know, what you think of that, you know, whether you're still kind of focused on capital light and whether there is some sense now, particularly with new accounting to look at traditional business again.
If you could comment on how you think those savings net flows will continue, that would be helpful. Thank you.
Thank you very much, Farooq. Philippe, the first question is for you, and then Cristiano, if you want, of course, to integrate, while question number two and three, Marco, are for you.
Thank you. Hello, Farooq. The answer to the first one is very simple and very clear. It's no, we do not consider increasing our debt. We are happy with the current level of the current leverage, basically. Just a word on the third question. We are not considering changing our strategy on the Life insurance business. We remain very focused on capital light products and protection products.
Farooq, if I can give you an integration of the very clear and simple answer by Philippe. It is evident that we were already looking many in many reporting times on our solvency related leverage. This is not changing. IFRS 17 is just bringing it closer. We have the same animal to which we took our decision. It is really important also to highlight the importance of having reducing the leverage to reduce the non-operating charge in an uncertain environment, which will allow us to have better predictability and lower uncertainty in the final cost we have to pay, especially in a volatile environment like we are now.
Hi also my side. Topic price increase in P&C. Just for clarification, what we have here is really our change in premium due to the price increase, so the average annual premium change, which is not a rate increase. What I want to say that is the real premium that we see flowing thanks to the price increase that we had in 2022. A couple of comments on this. As you can see, we believe the growth in non-motor has been particularly strong. We see this as a real positive effect developing across 2022 from the beginning of the year until now, and I think it will continue to flow in the next months.
As long as we will see inflation and a change in the environment, we will continue to push for this. In non-motor, I think you see, we reported 0.9%. Again, here I think you, we are seeing more movement in the last part of the year, we believe in the next months, more premium increase will come. Keep in mind that this is not the rate that we have injected on renewal rate or new business, but it's the real actual premium change that we see.
Again, on motor, we believe that as we have I would say, we have seen a more dynamic environment in the second part of the year on motor. We believe that this will continue over the next month. I would just wanna emphasize that this average annual premium increase is a metric that we believe it's a fair measure. It's a good measure to show you what is the effect of rate change inside our portfolio. I would go to the third question, so question.
As Philippe said, in Italy in particular, but overall, we will keep our underwriting posture unchanged because we think that it's good to have an healthy portfolio and keep on underwriting an healthy portfolio, especially on capital light. Let me stress that our value proposition is to enlarge the type of product that we sell. We wanna put into our product a different type of line of business, so traditional saving, unit link and protection. We believe these large value proposition will make sure that our customer will benefit from the full power of Generali in term of protection, of risk protection and investment.
Next question, please.
The next question is from Michael Huttner of Berenberg.
Fantastic, thank you. Congratulations not just on the results but the disclosure, which is really lovely. I have three questions. The first one is, you mentioned the one-offs in the Life. Can you talk a little bit more about this and the dynamic of reserving, which I think you allude to in one of the slides? I was looking for a comment on Swiss reserves, any granularity here and how this could look going forward would be really helpful. The second one is on also in Life, you mention in the expenses which kind of consume part of the improvement that effectively you're investing, and that's my words, in growth in Asia.
Here is just interesting, what sort of payback do you see on that kind, that investment? The third question is more on strategy. More generally deals, what's the outlook at the moment? More specifically maybe, there was some mention in the press a while back that you might be looking to sell off some or reinsure parts of the Cattolica Assicurazioni back book. Any views on that? Thank you.
Thank you very much, Michael. The first two questions are for Cristiano. The third one are for Philippe and Marco.
Hello, Michael. Let's discuss a little bit of the one-off in Life. There are, I think, three areas of point of release. One is related to a natural effect of alignment in Italy on the interest rate risk reserve, which has been brought homogeneously to a level which is coherent with the actual interest rate and diversification of the portfolio. This is part of the one-off. Another one-off effect you should consider is the technical benefit had in France related to a release of mortality table. This was already commented in nine months.
I just recall that basically we had the opportunity, thanks to a law, to offer to our clients of pension products the opportunity to decide whether to have lump sum versus the annuity. The client who decided to opt for the lump sum clearly made a change in our mortality reserving because we were not having any more the longevity risk related to this kind of client, which is a one-off release stemming from this change in regulation.
Regarding Switzerland, we had, thanks to the improved reserving already done in the previous year and improved market condition, we had a lower need of reserving, and we went to a number which is below EUR 100 million, which is clearly more definitely closer to the correct level of normal rate. On that, I would like to recall you that the reserving in the world of IFRS 17 will not exist anymore from the point of view that you have a full economic valuation of your asset and liabilities, which has to be covered every moment. The moment they are not covered, you enter in the so-called loss component. Clearly, by nature, the reserving is done accordingly.
Other one-off effect were related in Germany to the fact that we have an asymmetry between the realized gains to put and allocate in the ZZR reserve, which were done mainly in the first part of the year, and we are happy because we did it in moment where rates were much lower than end of the year. Due to the swift change throughout the year, the need for the ZZR reserving was completely different. We had this, let's say, excess of realization compared to the need of the reserving. I hope this is giving the full view on the first EUR 250 million effect of the one-off of Life.
On the other side, the Asia, for sure, we are reducing the payback of our, of our portfolio overall at group level. It is, I should say more than three year, almost three years, lower than the year- end, the year- end 2016, so compared to seven years, six years ago. Asia business is a little bit longer in nature, so has a slightly higher than average group payback. In any case, don't forget that they are very healthy and loaded products because this is the characteristic of those, of those markets.
Thank you.
On the third one, we are as usual working on looking for some good opportunities for M&A as long as they create value for all stakeholders and as long as they are fully consistent with our strategic framework and our financial discipline. On the inforce management on the back books, we are still very much focused on this, but you know, inforce management is n ot only portfolio disposals, it's also about working on the liabilities.
It's also about using reinsurance as well. Obviously, since we announced our during our strategic plan presentation, our targets in terms of in force management, the market condition are completely different. In force management with zero interest rates and in force management with higher, much higher interest is something different. We are opportunistically working on the in force management and talking about Cattolica. This is a good example because we decided to exercise our put on the Iccrea joint venture, which is already an in force management decision consistent with our strategy.
Thank you very much.
Yes, maybe just a compliment on what Philippe was saying. I would love to say that as Philippe was saying, we, there are many way to do in force management, in particular working on liabilities. A couple of point, in Italy, we have been working on renewing contracts and exiting from some contracts from, for a total of almost EUR 7 billion. This is really something that in the last months we have really been doing. Same thing in France for around EUR 500 million. I think this is really also a way of making sure that we do liability management. On the other side, on Cattolica, I think it's always important to keep updated our process on reviewing the back book that we have.
Also Cattolica is part now of this process. When we will see that portfolios are not in line with the profitability and overall measure that we have on looking at portfolios, we will put them under greater scrutiny.
Fantastic. That's helpful. Thank you.
Next question, please.
The next question is from Andrew Ritchie of Autonomous.
Hi there. A couple of questions. First of all, the very high level in motor, are you suggesting that the combined ratio of that class across the group has now bottomed or rather peaked, given the push through of rate? Obviously we saw that combined, I think it was 97% in the first half, 98% for the full year. Will it deteriorate further before improving because of just timing effects, or should it start improving from here? That's on motor. Second question, just very quick clarification. Do I assume for non-motor, you've shown us the rating, the price effect, but indexation would be on top of that. That's just pure price. As I understand it, there's a high degree of indexation in non-motor because of the property.
The only other questions were just on private equity, has there been any sort of further review of exposures at year-end given the uncertainty? Related to that, when I look in the report and accounts at the very back, I noticed a significant increase in Level 3 assets. I think they've doubled. There's a reference made to the macroeconomic context, which is, has changed the view of liquidity of certain of those assets. Could you just clarify what's going on there? Thanks.
Thank you very much, Andrew. I would say, Cristiano, the first question is for you. The second question is for Marco. Then the third question is again for you.
Hello, Andrew. The combined ratio of motor outlook. First of all, we are completely focused to increase and align to the level of desired profitability, as I think both Philippe and Marco showed you in the action done so far and the action that will continue. I will adjust to put things into context. Don't forget that motor business is overall operating result accounting for something which is less than 8% of the total operating result reported at group level. We are talking about something which is core as an element for the client, but all the value is growing around, especially the non-motor.
The outlook for the motor, I think we need to wait, the full 12 months of 2023. Don't forget that, I'm talking about not on the IFRS 17 with discounting. I'm really looking at the undiscounted effect of, on combined ratio, which is more proper on a technical sound way to watch it, and not to profit from the interest environment, which shows a better combined ratio. We have to wait the 12 months to see the benefit. We are seeing healthy growth in the renewal and new business premium, especially in countries which have a lot of the bulk in the first two months of the year, like it was for Germany. The outlook and the actions done so far are bringing into the direction.
We need to wait the full 12 months of 2023 in order to get to the full benefit also for the pro rata temporis effect. On the second question, I hand over to Marco, then I come back.
Hi. Clarification on my side. The indexation is included in the effect that we shown. Consider that, as a reminder, 60% of the non-motor book is indexed and around 12% of the motor book is indexed overall. Our level of indexation is at 40% of the portfolio. That increase in annual average premium that we have shown would include the effect of indexation that clearly has a time lag, because you need to have a reported inflation to then link the renewal of the premium. There you clearly, you have a time lag on this effect.
On the private equity and in general the Level 3, I start from the Level 3 part. What is happening is not that we are changing the fair value of asset. We are changing the so-called fair value hierarchy. What we did is due to the change the market macroeconomic condition in accordance also with our, with our auditors, we acknowledge to have a treatment of the private debt as a Level 3 asset like we are already doing with our private equity business. It is nothing affecting valuation. It's just hierarchy valuation on what we do think, because there are assets which do not have a daily NAV, but a weekly NAV, what we put into the Level 3 category.
On the other side, regarding the private equity, we had recently performed a full review of the valuation using both public market benchmarks for a relevant portion of the portfolio. Basically, what is coming out coherently what we have done already on a recurring basis is that our, the asset manager we are selecting and the general partner adopted the conservative valuation approach. Basically in the backtesting we are doing on our portfolio, there is always an exit value which has been historically higher than the valuation in the funds on the last 12 and 24 months before the exit. This is what we've done so far.
I would like to highlight that part of the increase of the value of the private equity euro serving is also related to a foreign exchange effect, related to the fact that the vast majority of the private equity business is done in a U.S. dollar equivalent. When it is reported in our account, due to the increase of the dollar versus the euro, there is also a fair value change positive coming from this effect. Hope this clarifies the point.
Okay, thanks.
Next question, please. Thank you, Andrew. Next question, please.
The next question is from James Shuck of Citi.
Yeah, thanks for taking my questions. Sounds like you might give a summary anyway, just based on your answer to Andrew a second ago, but I was gonna ask for the combined ratio in motor and non-motor full year. Apologies if I missed that in the presentation. Linked to the combined ratio, I'm looking for attritional loss ratio development, kind of underlying ex Nat Cat, ex Argentina. At nine months, that deteriorated 10 basis points. At full year, that seems to have gone to 80 basis points, so just keen to understand what have happened in the fourth quarter. Next question was around kind of lapse risk and potential increased competition for deposit accounts.
I can see that you've booked operating variances of - EUR 800 million due to updated surrender assumptions in France. Just keen to kind of understand what lapse risk you're seeing at the moment, whether the current turmoil might increase that. Finally, just on non-motor premium, it seems as if you're saying all of that premium growth, 11% is coming from rate rather than volume. I guess my question is what's happening on the volume? This is meant to be a key strategic growth target for you. It looks like group holding is where it came through a full year. Just wondering what's happening in terms of the penetration of non-motor as opposed to just the rate increases. Thank you very much.
Thank you very much, James. Apologies, your line was a bit blurred. Let me repeat the questions to make sure that we have them right. You would like to have the motor versus non-motor combined ratio for the full year 2022, that is for Cristiano. You would like an update regarding the current year attritional development of the combined ratio from nine months to full year, the overall and excluding Argentina and M&A, that would also be for Cristiano. An update regarding the lapse risk we see in our book in the main geographies given the competition for deposit accounts, that would be for Marco.
The last one, if I understand correctly, the trends in non-motor GWP growth, what is happening in terms of volumes given that this is one of our strategic targets in terms of growing the GWP non-motor, given that there is a growth that is driven by price indexation? Did we all understand that correctly, James?
I think you got all of those precisely. Just part of the growth in non-motor, though, it all seems to be coming from group holding, on the slide. Just keen to understand that.
Okay, perfect. Cristiano, if okay, I would say that the two questions on the combined ratio are for you, while the question on lapses is for Marco together with the one on the development of the non-motor GWP volumes.
Hello, James. Motor, non-motor core so year- end 2022.
Combined ratio of motor is 98.2%, this is consistent to what I told you before, which is bringing, including the investment result less than 8% of the total group operating result and non-motor at 90.3%. 90.3%. This is the year-end 2022 combined ratio of the two segments. Moving into the attritional development, ex Nat Cat and Argentina, I would like to highlight also that if we take out the newly acquired companies like Cattolica, as well Malaysia and India, which you know, it is a country where the combined ratio is above 100% and we are above 100% as well.
If I compare the attritional combined ratio of the business in P&C, it is moving at year-end 2021 on a like-for-like basis from 62.9% to 63.6%. I recall you that at the nine months, this number of 63.6% without Argentina, Cattolica, and M&A was 64.2%. For sure, these are the trends we are observing. In order to have a better answer to your question, I would really strip out also the newly acquired entity to really look at the underlying machine before Argentina and acquisition, how it's going. Hope this clarifies this point.
Yes, it does. Thank you.
Yeah. On my side, let's first comment on lapses. I think in the first nine months of the year, I would say lapses remain mainly aligned to 2021, while an increase has been observed mainly in the fourth quarter, and mainly in the type of distribution there are more bancassurance type of distribution. That is where we would see also going forward a little bit more risk. On the other side, where, as we were saying at the beginning, where we were able to offer the client more diversification the type of products, so putting together protection, unit-linked, and traditional saving on our main agent. There, I would say, we are still having a normal type of lapses.
That is the type of risk that I see at the moment, very linked to the type of distribution. Your last question, in trending non-motor growth. Probably one clarification. I said most of the volume, so the growth was coming from a price effect. There is a growth that we have also on volume. It's more limited. On the other side, let me highlight the growth that we had in assistance with the Europ Assistance. That is really something that have stand out in this year in term of growth, thanks to some large contract that we have.
Overall, I think there is a nice growth that is coming from pricing, mainly for pricing, not only for pricing and an increase in the volume of Europ Assistance. Overall, I think give us the point on the strategy that you mentioned.
[crosstalk].
Sorry, James, the Europ Assistance growth is exactly the group holding and other you were asking me because it is accounting that line. Just to clarify.
Yeah, I figured that. Thank you so much.
Next question, please.
The next question is from William Hawkins of KBW.
Hello. Thank you very much. Thank you. You've already given good details to Andrew and James, I really wanted to come back again, please, to the combined ratio jaws for 2023 and 2024. You know, given what you're saying about rates versus claims, are we looking at jaws that are improving the attritional claims ratio or maybe we're still seeing a deterioration 'cause the rate changes are not enough with claims inflation? Given the way you've answered the other two questions, it does sound to me like you're kind of wanting to equivocate on this point. It is good news that we're getting rate increases, but they're not necessarily sufficient relative to claims inflation to be confident in an improving claims ratio. I wondered if you could just really focus on that point for me, please.
Secondly, you had seemed to have had a big step up in positive reserve development in the second half, which is great. I'm just wondering if there's any particular drivers of that, or anything to think about, please. Lastly, again, you might have already touched on this when you were talking about the one-off to Michael, but can you just help me understand what's happened to the Italian investment margin? It's gone up very significantly 2022 on 2021. Actually, when I look at the key drivers, things like investment income or even realized gains, they haven't moved very much. It seems to be that the shareholder's getting a bigger share of this relative to the policy holder.
I don't know if this is related to it, but sort of a last one, please. On slide 21, there isn't any change in your guarantees this year. They're 1.15%, so even to the second decimal place, they haven't gone down much. I just wondered why. You know, I've kind of been assuming that your guarantees should be falling over time, but they seem quite stuck in 2022 versus 2021. Thank you.
Thanks, William. I think, Cristiano, all the four questions are for you.
Yes, William, just to clarify, very clearly, we are not avoiding the answer, I hope. We, on the combined ratio outlook, what we said is that, we had increase, maybe we didn't focus too much on the pruning we are as well doing on the portfolio, which by the way, is affecting the average premium because typically you prune the riskier part of the segment where the average premium is higher. What we are telling you is that we are bringing back towards the desired level of profitability. We need the full 2023 to start, seeing the effect.
We will see positive effect in accounting combined ratio in 2023 for the simple benefit that discounting in IFRS 17 reserve will bring a relevant positive benefit. We are not focused on that benefit because we are focused on the underlying undiscounted effect, which is only brought through the actions. The price increase were done in all the segment, all the region, and we are following through in case there is further deterioration of inflation. What we are telling you is that we did all that was needed to get to the desired 2024 underlying technical landing point, and we need to wait the full 2023 to start the trajectory back in line on the undiscounted.
On the positive prior year, details, I would like to highlight that we had a positive effect coming also to the extremely prudent reserving that we always had, at group level. Don't forget that notwithstanding a prior year development positive, we also, this is on the accounting side, on the best estimate of liabilities during 2022, we increased the best estimate of liabilities by EUR 500 million in the P&C business due to inflation expectation and as well management in order to have lower uncertainty and being prudent going forward. This, also, if you look at the best estimate movement, is partially absorbed by the very positive, real prior year development when we pay a claim and the actual number paid is much lower than the reserved amount.
By the way, the net effect could have been the double if we consider the full effect without excluding the prudency also that we are continuously keeping in the allocation. Third question related to the investment margin. Okay, first of all, let me recall you that the Italian interest rate risk reserve is fully allocated to the shareholder, and it is not given to the policyholder in case of release. This is shifting the investment result positively, and this is part of the one-off.
It is in the end low slightly above EUR 100 million benefit that we had in the operating result Life, which is accounting for basically half of the one-off effect I was mentioning, the EUR 250 million. On slide 21, I think it is a tricky element of the guarantees because it is explained that the guarantees are calculated on the average of reserves when guarantees exist. Unfortunately, in reality, fortunately for the group and its capital intensity, since a few years, we are selling basically in Italy only death-only guarantee.
All the reserves and the premiums related to the collection of in a year, plus the existing reserve of those premiums are not part of the 1.15% calculation. Even if we put a zero instead of a no guarantee, the number would have been already very close to the 1%. It is a wrong number because we do not have a guarantee. I hope this clarifies the tricky part on the average interest rate versus versus the stock.
Super helpful. Thanks, Cristiano.
Thanks to you, Will. Next question, please.
The next question is from Andrea Lisi of Equita.
Yeah, hi. Thank you for taking my questions. The first one is on saving products. I saw there was an acceleration in net outflows of saving products versus last year. Just want to understand how much this is consistent with your optimization strategy in the Life business? In on the other hand, which portion was driven by the investment decision by clients? Connected to this, if you can provide us more color on the movement of the reserve of traditional products we saw in slide 17? The last question is on Eurovita. If you can provide us some update of the situation?
We read on newspapers that there are talks to solve this situation, if you can provide us your point of view on that. Thank you.
Thank you, Andrea. Marco, the first question on the outlook for service products is for you. The one on live reserves movements, Cristiano, is for you, while the third one on Eurovita is for Philippe.
Hi. The saving product outflows, I believe, is really consistent with our strategy. It's mainly consistent with our strategy because, you know that since some year, we are putting on the market a more balanced product between the different lines. That has an effect to increase the unit-linked and decrease the saving product. The outflow is mainly driven by this strategy. Clearly, we had some more outflow in the last quarter, but overall, we remain consistent with our strategy also for the next months in being focused on bundle solution because we still think that this is the right thing to do in this kind of environment. I would say it's mainly most of the outflow that you see is consistent with our strategy.
Andrea, the more color regarding slide 17 and the movement of the reserves. The walk from EUR 424.5 billion to EUR 414.7 billion. The Life net inflows is the published number, and it is mainly entirely positively driven by the unit-linked and the protection versus a negative outflow in the traditional component. By the way, the definition of traditional embeds as well the protection, don't forget when you look at the EUR 315.8 billion. The loading, risk and surrender result is the amount of charges we take together with the exit.
The policyholder share of investment result is mainly driven by the movement of the mark-to-market on especially on the unit-linked, because being negative, you are passing the mark-to-market of the unit-linked on the EUR 108.7 billion starting year-end 2021, to get to the EUR 100.6 billion, which is embedding also this negative effect. The last element, the EUR 3.3 billion, is a combination of some effects. First of all, there are some exchange rate and other effects, but especially we are consolidating Future Generali India Life, the company we are consolidating since we became a major shareholder mid of 2022 in Malaysia. Broadly speaking, we are adding EUR 1.2 billion of reserve. Why the number is negative?
It is negative because it is driven to what Philippe told you before about the exercising the put option on Iccrea, the BCC Vita business, which accounts for EUR 4.1 billion of reserves, which are exiting the technical provision and are allocated in IFRS 5 accounting, which is ready to be disposed and not any more part of the reported reserve. I repeat, we are disposing with the exercise of the put EUR 4.1 billion.
On the third one, first of all, I'm not used to comment what is written in the newspapers, but what I can tell you is that the are no discussions at all with Eurovita. We are very much focused on our business model, which is to offer personalized and safe protection solution to our customers, through our very professional distribution channels. This is what we are doing, and this is what we'll continue doing.
Next question, please.
Thank you.
The next question is from Sudarshan Bhutra of Societe Generale.
Hi, hi there. Good afternoon. Just one question from my side. This is regarding the capital management pie chart that you gave. Based on the cash flow of EUR 5.5 billion over the last two years and the cumulative dividend payout of EUR 3.5 billion, you would have approximately EUR 1.5 billion-2 billion of discretionary cash flow available with the company right now. I just wanted to understand how much of it has already been used up and what is sort of remaining? The second part of this is there, you know, what are your targets or what are the M&A targets that you wish to deploy this capital? Is there any change based on the current macroeconomic environment on your preferred targets?
Thank you.
Perfect. Thank you very much. The first question on the available cash for capital deployment is for Cristiano, while the second question, Marco, on the approach to private assets and the allocation to private assets within the context of the higher interest rate environment are for you.
Hello, Sudarshan. Basically, what we did so far, of the EUR 2.5 billion-EUR 3 billion, which are allocated in the three-year time, we spent already almost EUR 0.5 billion of them for first taking the minorities of Cattolica and start the squeeze-out process and as well to increase the ownership of our India subsidiaries, which were not accounted for. There is the other redeployment. Don't forget, we also recently concluded, the EUR 185 million buyback for the long-term incentive plan of the future, which we recently concluded last week.
On my side, in terms of overall positioning on the asset side, I think clearly the changing condition require to review our way of allocating assets. Clearly we have been more prudent in terms of approach on equity, and we have a proven credit exposure underwriting. This is what we do in terms of private in private asset. Clearly going forward, we will review that according to the different condition. In the recent year, we have clearly increased our weight in general account investment. We've moved from 9.9%, around 10% in 2019 to around 18% in 2022.
We want to continue our strategy, gradual strategy, gradually increase in this strategy, but very much looking at different condition overall. We will increase, and we want to continue our gradual growth in exposure in private asset, again, being very much focused on the context.
Next question, please. The last question is the next question is the last one, we can take, operator.
Thank you. The last question is from Alberto Villa of Intermonte.
Hi. Thank you very much for taking my questions. Just going back to the lapses, I was wondering if you can provide us an update on the last week's developments, if there has been any impact by the situation, especially in Italy for the Eurovita one, if there has been any pick-up in lapses in Life business. That's my first question. The second one is if you can provide us an update on the outlook for the contribution of the investment income given the current interest rate environment for Life and P&C, the current investment rates, and how should we look at 2023 for investment income contribution? Thank you.
Thanks, Alberto. I think the first question, Marco, is for you, while the second question, Cristiano, is for you.
I think in terms of development of lapses, I think it's exactly as we were mentioning before. There is one specific point that we have seen in the last months, I would say no more than that. The general Italian situation is a good situation. Consider also that our share of bancassurance distribution is very limited compared to overall the distribution that we have. That is something that is important to keep in mind as this might have an impact on that share. Cristiano, probably—
Yes.
The second question.
The, let me comment with two information. First one is related to if we look in retrospective the business which is sensitive due to shorter duration of in reinvesting, which is the P&C, half of the investment result growth is mainly driven by a higher current income, okay, in P&C, half of the EUR 110 million. Basically, the rest was, I should say 2/3, and the rest is mainly related to the increase of the perimeter, thanks to the newly acquired entity like the other units in Malaysia, India, and as well the extension to Cattolica.
Having said that, when we look at the reinvestment yield so far, in the year, mainly done on publicly listed bond, we are speaking about something in the order of 4.5% in Life and in between 3.6% and 3.7% in P&C. This is the effect. Don't forget that going forward, I'm not commenting too much the pickup in Life, because clearly Life, due to the variable fee approach in IFRS 17, is measured against the liabilities, and so clearly has also to be accounted accordingly compared to the P&C, where you see immediately as well the effect.
Thank you, Cristiano, and thanks everyone for participating to today's call. Should you have any additional question, please feel free to reach out to the investor relations team. We are at your full disposal. Have a nice day.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.