The third largest insurance company in Europe, Assicurazioni Generali, said it intends to reduce costs by EUR 150 million or USD 204 million more and bring down debt so it can improve finance and bolster profits. The move will enable the Trieste-based insurer to save EUR 750 million in costs in two years and reduce their debt-to-leverage ratio to under 35% from its current 40%, the insurer said. By 2016, Generali said it also intends to increase its savings to EUR 1 billion.

Generali Chief Executive Officer Mario Greco said in a statement, "In this second investor day we confirm our existing targets and provide additional ones. Our shareholders can see a clear roadmap to greater returns in the near term."

Greco is divesting the firm's non-strategic assets to concentrate on its core business so it can improve its balance sheet and enhance profitability. According to a Bloomberg report, Generali is already over the halfway mark of its target to raise EUR 4 billion from asset sales by 2015. Earlier this year, the insurer sold its Mexican businesses and its reinsurance business in the US.

The company's market value is pegged at EUR 25.8 billion as of yesterday, after Generali shares jumped 0.4% to EUR 16.59 in Milan, according to Bloomberg. Since Greco was appointed in August last year, Generali stocks have risen over 60%. This is comparable to the 48% gain posted by the 26-company Bloomberg Europe 500 Insurance Index, the report added.

For the third quarter, Generali's profits increased 75% to EUR 510 million. This was due largely to earnings from its life segment and property and casualty operations. The insurer intends to reach its goal of a 13% return on equity in two years. It also reiterated its plans to increase its Solvency I ratio to over 160% by 2015 from the October's figure of 152%. The Solvency I ratio is a measure of a firm's ability to absorb its losses, the report said.