Italian regulator asks insurer to strengthen capital by €500m

Written by Adam Cadle

02/06/2020

Italian insurer Cattolica Assicurazioni has been asked by Italy’s insurance regulator IVASS to strengthen its capital by €500m and to draw up a plan to boost its solvency and liquidity position.

Cattolica said IVASS had highlighted the weakened solvency position of the insurer “as a consequence of the deterioration of the financial markets following the spread of the COVID-19 pandemic”.

Shares in the company have fallen more than 15% to hit an all-time low.

IVASS also warned the group about its asset allocation “highlighting the exposure to lower quality bonds”, describing them as those with BBB- or lower ratings or unrated ones.

IVASS asked the group to draw up a plan by the end of July to monitor the solvency and liquidity position at the parent company and its subsidiaries. Cattolica said the group’s solvency ratio stood at 122% as of 22 May. It had been at or above 160% until the end of 2019 but fell below that level due to the high financial market volatility triggered by the coronavirus pandemic.

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