Shares in Italian insurer Generali, a leading European insurance group, dropped almost 3.0 percent on the Milan stock exchange, after the company posted a 50-percent drop in 2011 net profit.
Generali shares were showing a loss of 2.75 percent in late morning trading on the FTSE Mib index.
The Trieste-based company said late on Tuesday that its 2011 net profit fell to 856 million euros ($1.133 million) from 1.7 billion euros in 2010, on the back of writedowns on Greek bonds and other assets for a total of 1.02 billion euros.
A Dow Jones Newswires poll had forecast a profit of 998 million euros. The group’s operating profit fell to 3.9 billion euros. The drop in net profit led the Generali board to recommend a reduced 2011 dividend of 0.20 euros per share, down from 0.45 euros in 2010.
The drop reflected difficulties in the core life insurance division, where margins were hit in particular by lower prices for Italian government bonds.
Generali was among the companies which insured the cruise ship Costa Concordia — which sank off the Italian coast in January — and the company is likely to book big charges for the accident in 2012.