Generali claims 'solid' capital position after Fitch downgrade

Italian insurer Generali has emphasised its "solid capital position" following its insurer financial strength (IFS) downgrade by Fitch Ratings.

Fitch has downgraded Assicurazioni Generali's and its core subsidiaries' IFS ratings to 'A-' from 'A' as a result of the recent downgrading of Italy’s sovereign debt.

According to the agency, Generali's credit quality is highly linked to Italy's sovereign rating given the group's exposure to Italian sovereign debt, in particular on its Italian books. Generali's exposure to Italian sovereign debt is high at 1.9x consolidated shareholders' equity at end-2019

The ratings also reflect Fitch's current assessment of the impact of the coronavirus pandemic and its economic impact.

Generali said: "It is important to note that the Group’s 2019 financial statements reflected a very positive performance, with a record operating result of €5,192 million, a net profit of €2,670 million, up 15.7% compared to the previous year, and technical excellence in all business segments.

"Although the effects of the Covid-19 pandemic are still uncertain at the moment, the Solvency II Ratio remains solid and has always stayed within the desired range."

"With regard to the exposure to Italian sovereign debt, the Group confirms the stability of the portfolio, which is almost entirely backing Italian technical reserves," the company said in a statement. "In the current context, the Group continues with the on-going execution in a rigorous and disciplined way of its “Generali 2021” Strategy. The Company has also already reached its objective of reducing the amount of debt and even exceeded the goal of lowering its cost."