Italian insurer Generali said Thursday it would place more emphasis on its asset management business as it reported its net profit was squeezed due to the ultra-low interest rate environment. The nine percent drop in first-quarter net profit to 535 million euros ($582 million) was below the average of 607 million euros expected by analysts surveyed by the financial data supplier Factset Estimates.

Nevertheless, Generali called the profit result "solid" given the prevalent ultra-low interest rates, which have depressed returns on investments, as well as a higher tax impact on its business. Operating profits rose 4.2 percent to 1.2 billion euros, while return on equity edged up 0.1 percentage point to 13.6 percent, in line with the management's target of a ROE of above 13 percent.

"The first quarter's results confirm the excellent performance in terms of the group's profitability and capital strength," Generali's chief financial officer Luigi Lubelli said in a statement. "In a scenario of persisting financial market volatility and low interest rates, and considering the absence of catastrophes during the previous year, Generali has continued its disciplined and effective approach to its core business," he added.

The insurer also announced its asset management unit would broaden its investment capabilities and enlarge its product offering. The aim is to provide more tools to business and individual clients to adapt to low interest rates, while it noted this would increase fee income for Generali.

Copyright Agence France-Presse, 2017