EL DORSINO È DA DEFINIRE - FIAT SpA

INSURANCE — TORO ASSICURAZIONI
During the first half of 2000, the Italian insurance market
continued to expand at a healthy pace, with improvements
in all segments of the casualty insurance and in life insurance.
In France, demand held steady at about the same level as last
year.
The performance of the principal Sector companies is
reviewed below:
Toro Assicurazioni S.p.A., the Sector’s lead company, wrote
549 million euros in premiums (+7.5%), with gains of 1.9%
for casualty insurance and 31.8% for life insurance.
At Nuova Tirrena S.p.A., premiums grew 7.4% to 344 million
euros, with increases of 7.5% for casualty insurance and 6.8%
for life insurance.
Roma Vita S.p.A. and its subsidiary Giano Assicurazioni
wrote premiums amounting to 952 million euros, down slightly
(-1.1%) from the same period last year, when the total
included the business generated by the branches of Banca
Nazionale dell’Agricoltura, which was then a subsidiary of
Banca di Roma.
Toro Targa Assicurazioni S.p.A. booked consolidated
premiums totaling 58 million euros (+41.3%).
Overall, Le Continent Group wrote premiums amounting
to 352 million euros (+68.4%), including 115 million euros
generated by the Guardian Group.
In order to achieve the high level of strategic flexibility needed
to negotiate successfully future agreements that could
strengthen the competitive position of its insurance business
in the international marketplace, Fiat launched a tender offer
for all the shares of Toro Assicurazioni it did not own, raising
its interest in this company from about 78.7% (75.3% after
the exercise of the outstanding warrants) to 100%.
The characteristics of the Tender Offer, which lasted from
June 12 to July 3, 2000, and its outcome are described in
the section of this report that discusses Significant Events
Occurring Since the End of the Period and Business Outlook
for the Balance of the Fiscal Year.
OPERATING PERFORMANCE
During the first six months of 2000, the Sector wrote
premiums totaling 2,259 million euros, for an overall gain
of 10.5% (+9.1% for casualty insurance and 11.7% for life
insurance).
Premiums earned were up 12.2% to 2,178 million euros.
During the period under review, the insurance operations were
adversely affected by increases in the average cost of claims
and, during the second quarter, by the enactment of new
provisions in the area of automobile insurance. Nevertheless,
the Sector turned in a positive performance, ahead of last
year’s results, owing to the beneficial impact of growth
programs launched in previous years and to the successful
implementation of measures that improved efficiency, while
reducing the impact of operating expenses (down from 13.6%
to 12.6% of premiums) and distribution costs. Even though
the financial markets remained extremely volatile, operating
income increased to 164 million euros, compared with 154
million euros in the first half of 1999.
Income before taxes amounted to 102 million euros, up
11.3% from the 91 million euros earned during the first six
months of 1999.
At June 30, 2000, investments totaled 12,200 million euros,
or 1,340 million euros (+12.3%) more than at the end of 1999.
Technical reserves grew 13.4%, rising from 9,733 million euros
at December 31, 1999 to 11,041 million euros at the end of
June 2000.
Performance of the Operating Sectors – Insurance
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