Italian insurance giants Generali and Fondiaria-SAI are among the latest insures to be downgraded by Fitch, after ‘stress tests’ in Italy and Spain, the ratings company said last night.
Generali’s rating was downgraded from AA- to A- with a negative outlook, and Fondiaria-SAI moved from BB+ to BB- because the companies were being affected by “ongoing pressures” from the debt crisis in Italy and Spain, Fitch said. Mutua was also downgraded from BBB+ to BBB, and Maprfe was affirmed at A-.
The ratings company warned the insurers of challenging investment conditions and fundamental uncertainties regarding sovereign debt, and added, “The ratings actions consequently reflect the degree of sensitivity of the insurers’ capital adequacy to stress test assumptions over the credit quality of their holdings of Italian and Spanish government and bank debt,”
It had been no secret that Generali had been suffering from the depreciation of its Greek bonds and market turbulence. The insurer reported a quarterly profit of EUR19.5 million, just 4 per cent of its profit for the same quarter last year (EUR439.8 million).
Fitch finished by adding the ratings may rise if the the debt situation “improves and stabilises”.