Investments

At 31 December 2012 total investments of the life segment increased to € 330,873 million (up 11.2% on equivalent consolidation area compared to 31 December 2011). Group investments amounted to € 277,032 million (up 11.1% on equivalent consolidation area), while linked policy investments reached € 53,842 million (up 11.8% on equivalent consolidation area).

In the life segment over the year the Group continued an investment strategy essentially based on an asset allocation in line with the technical reserve profile and, at the same time, keeping an adequate level of profitability for the undertakings with policyholders. In particular, within the Euro Area, measures were taken to pursue the objective of considerably reducing cross-border exposure, by matching the liabilities of each country of operations with domestic government bonds from that same country, without prejudice to the principle of matching assets and liabilities by currency.

The exposure to equity instruments decreased to 4.5% (5.3% at 31 December 2011), while the incidence of fixed income instruments increased from 81.7% at 31 December 2011 to 85.2%. The Group’s real estate investment was substantially stable with its weight of 3.5%, while the weight of cash and cash equivalents fell to 4.7% (6.8% at 31 December 2011).

Breaking down the bond investment portfolio, the exposure to government bonds slightly increased to € 119,019 million (€ 100,784 million at 31 December 2011), equal to 55.9% of this asset class (54.2% at 31 December 2011). The change of the period was due to both the recovery in value of investments and net acquisitions.

The corporate component also increased to € 93,954 million (€ 85,329 million at 31 December 2011), equal to 44.1% of the bond portfolio (45.8% at 31 December 2011). The increase was due to both the recovery in value of investments in the financial and non-financial sectors and net acquisitions carried out during the year; specifically, the Group preferred securities aiming at reducing credit risk and thereby optimizing the capital absorbed by this asset class.

Lastly, the average duration of the bond portfolio was 6.7 years (6.1 years at 31 December 2011)

Life segment financial position
  31.12.2012 30.09.2012 31.12.2011
(€ million) Total book value
% of total
Total book value
% of total
Total book value % of total
Equity instruments 12,487  4.5 12,397     4.6 13,415 5.3
Fixed income instruments 236,107   85.2 224,922   83.7 208,088 81.7
Bonds 212,973  76.9 201,161 74.9 186,112 73.1
Other fixed income instruments 23,158      8.4 23,761         8.8 21,976 8.6
Held to maturity investments         3,707 1.5
Land and buildings (investment properties) 9,751          3.5 9,774         3.6 9,824  3.9
Other investments  5,794 2.1 6,311 2.3 6,018 2.4
Investments in subsidiaries, associated companies and joint ventures 4,482  1.6 4,896      1.8 4,524 1.8
Derivatives 727 0.3 612       0.2 544 0.2
Other investments 586  0.2 804  0.3 950 0.4
Cash and cash equivalents 12,894 4.7 15,168  5.6 17,257 6.8
Total 277,032  100.0 268,572  100.0 254,601 100.0
Investments back to unit and index -linked policies 53,842   52,666   58,312  
Total investments 330,873   321,239   312,913