(update with Q1, H1 guidance, strategy, finance)
MILAN (Thomson Financial) - Fondiaria-SAI SpA said preliminary estimates
show excess capital was about 1.025 billion euros at the end of 2007, up 10.2
percent compared to the end of 2006.
However, the excess capital fell to 841 million euros at the end of the
first quarter due to acquisition of Serbia's second largest insurance group DDOR
Novi Sad and the sale of Po Vita, it added.
In a meeting with analysts, the company said that it is studying an about
250 million euro financing to increase its excess capital to about 1 billion
euros.
The operation could be achieved before the summer, after when the insurance
company could launch a subordinated financing.
CEO Fausto Marchionni reiterated that the group is not exposed to the
subprime market.
He added that the acquisition of DDOR is a first step towards further
expansion in emerging markets.
But, the group will not sacrifice its profitability levels in expansion
plan, he said, adding that it intends to continue its dividend policy.
Fondiaria-SAI plans to pay a dividend of 1.10 euro per ordinary share,
representing the distribution of 60.2 percent of its 2007 net profits, while its
Milano Assicurazioni SpA unit will pay 0.34 euro per share, or a 72.8 percent
payout.
The company will present a 2009 to 2011 business plan in September, after
having achieved its previous three-year plan a year early, Marchionni said.
He added that he does not expect a significant improvement in the group's
first quarter results due to regulatory changes.
Marchionni advised to focus on the first half rather than on the first three
months to assess the group's performance.
The manager expects the performance over the first six months to be more
positive.
philip.webster@thomson.com
pw/tc/pw/ejp/pw/jag
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