Investments
Property and casualty segment: investments
| (in € million) | 31/12/2016 | Weight (%) | 31/12/2015 | Weight (%) |
|---|---|---|---|---|
| Equity instruments | 2,151 | 5.5% | 2,489 | 6.3% |
| Fixed income instruments | 29,136 | 73.9% | 26,680 | 67.3% |
| Bonds | 25,827 | 65.5% | 23,793 | 60.0% |
| Other fixed income instruments | 3,310 | 8.4% | 2,887 | 7.3% |
| Land and buildings (investment properties) | 3,778 | 9.6% | 4,338 | 10.9% |
| Other investments | 1,475 | 3.7% | 1,524 | 3.8% |
| Investments in subsidiaries, associated companies and joint ventures | 1,494 | 3.8% | 1,541 | 3.9% |
| Derivatives | -27 | -0.1% | -72 | -0.2% |
| Other investments | 8 | 0.0% | 55 | 0.1% |
| Cash and cash equivalents | 2,901 | 7.4% | 4,593 | 11.6% |
| Total investments | 39,440 | 100.0% | 39,624 | 100.0% |
Total investments in the property&casualty segment fell from € 39.624 million at 31 December 2015 to € 39,440 million (-0.5%).
With reference to the exposure to the various asset classes, the fixed income portfolio was up to € 29,136 million, accounting for 73.9% of the total. On the other hand, there was a fall in the exposure to equity instruments, from 6.3% at 31 December 2015 to 5.5%, while the exposure to real estate investments fell from 10.9% to 9.6%.
Finally, the percentage of cash and cash equivalents decreased from 11.6% at 31 December 2015 to 7.4%.
With reference to the breakdown of the bond investment portfolio, exposure to government bonds increased, standing at € 12,346 million (€ 10,317 million at 31 December 2015), amounting to 47.8% of the portfolio (43.4% at 31 December 2015), against a substantially stable corporate component, of € 13,480 million, with a ratio of 52.2% (56.7% at 31 December 2015).
The main movements in the asset allocation compared to 31 December 2015 were due to the increase in government bonds and to the decrease of equities and cash.
The reduction of the equity exposure is attributable to the prudent approach taken due to the volatility and the negative performance of the equity markets, in order to protect income statement and equity position. Cash was reduced in order to limit the dilution of yelds, which are currently negative for bank deposits.
Finally, the average duration of the bond portfolio was 5.4 years (5.0 years at 31 December 2015), in line with the Group’s ALM strategy.
Property&Casualty segment: return on investments
| 31/12/2016 | 31/12/2015 | |
|---|---|---|
| Current return (*) | 3% | 3.2% |
| Harvesting rate | 0.5% | 1.4% |
| P&L return | 3.2% | 4.1% |
(*) Net of depreciations.
The net current return of total investments in the property& casualty segment fell slightly to 3% (3.2% at 31 December 2015), with related incomes amounting at € 1,195 million (€ 1,267 million at 31 December 2015). The harvesting rate decreased to 0.5% (1.4% at 31 December 2015).
Property and Casualty insurance provisions
Propery&Casualty: technical reserves
| (€ million) | 31/12/2016 | 31/12/2015 |
|---|---|---|
| Net provisions for unearned premiums | 5,011 | 4,972 |
| Net provisions for outstanding claims | 25,158 | 25,036 |
| Other net provisions | 476 | 475 |
| Property&Casualty insurance provisions | 30,645 | 30,482 |
| of which motor | 13,631 | 13,487 |
| of which non-motor | 17,014 | 16,996 |