S&P maintains negative CreditWatch on Generali

Rating agency Standard & Poor’s maintains a negative CreditWatch on Italy’s insurer Assicurazioni Generali and its related subsidiaries.

According to the rating agency, the new strategic plan presented by the group following the recent appointment of Mario Greco as chief executive officer and Generali’s exposure to the weak Italian economy and domestic investment markets have left material uncertainty over the outcome of Generali’s new strategy and the resilience of its balance sheet to risk and volatility in the domestic operating, economic and financial environments.

“The CreditWatch reflects our view that there is material uncertainty regarding
Generali’s strategy and its recent announcement of new management and potential reorganization in Italy. It also reflects our concerns about the higher-than-peers’ exposure of the Generali group to the Italian economy,” S&P said.

As of end-June 2012, Italian assets made up 23% of Generali’s investments, or about three times its consolidated regulatory  solvency capital.

Moreover, given Generali’s complex and wide reaching international  structure, the strategic orientation of the new management could affect the group’s financial profile and business position.

“In particular, we will monitor the impact on the Generali group’s future capitalization and its financial flexibility, which we view as the main rating weaknesses,” S&P said.

 

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