Moody’s Downgrades Three Major Italian Insurers
Moody’s lowered the credit rating of three major Italian insurers on Tuesday, piling more pressure on the euro zone’s third largest economy after a string of downgrades on Monday and a sovereign downgrade last week.
Italy’s largest domestic insurer Generali Assicurazioni and its subsidiaries were lowered to Baa1, while Unipol Assicurazioni, and Allianz Spa had ratings cut by two notches each.
“The downgrade of Generali reflects the insurer’s direct exposure to Italian sovereign risk in terms of both investment portfolio and business profile,” Moody’s said in a statement.
By the end of 2011, Italian government bonds represented 19 percent or 46 billion euros ($56.18 billion) of Generali’s total fixed-income portfolio, or 253 percent of shareholders’ equity, according to the statement.
Government bonds constituted 47 percent of the fixed income portfolio of Unipol Assicurazioni with 222 percent of shareholders’ equity.
All the institutions mentioned in the statement were given negative outlooks.