Italy discusses break-up rescue for Eurovita - sources (updated)

UnipolSai Assicurazioni SpA

11/05/2023 12:57

(Adds comment from industry sources)
       MILAN, May 11 (Reuters) - Italian authorities and
financial firms on Wednesday discussed plans to rescue Eurovita
by dividing up the troubled life insurer among leading players
in the industry, two people close to the matter said.
    Under the scheme, top insurers Generali  GASI.MI , UnipolSAI
 US.MI , Intesa Sanpaolo  ISP.MI , Allianz  ALVG.DE  and Poste
Italiane  PST.MI  would each take on a piece of the Cinven-owned
insurer, the sources said.
    The companies involved declined to comment or were not
immediately available for comment. 
    Under the ownership of the British private equity fund,
Eurovita grew rapidly in recent years, distributing its products
through several dozen banks.
    It ran into trouble when higher interest rates reduced the
value of its government bond holdings and also prompted
customers to redeem their insurance policies early to reinvest
the money into higher-yielding products.
    Cinven's unwillingness to recapitalise the insurer hastened
redemptions, the Bank of Italy wrote its in Financial Stability
Report last month, eventually prompting authorities to take over
the insurer and freeze redemptions.
    As of the end of March, redemptions in Italy's life sector
amounted to 119% of premiums for life insurers that rely on
banks and financial advisers for their distribution, the Bank of
Italy said.
    Cinven eventually agreed to a 100 million euro ($110
million) capital injection, but Eurovita needs a total of at
least 400 million euros, sources have previously said.
    Discussions are ongoing and the insurers that have been
called upon to help would also like to get banks that have been
distributing Eurovita's products involved in the rescue.
    Any solution is still a long way away, two industry sources
said.
    Poste Italiane CEO Matteo Del Fante said last week the
solution for Eurovita would see the Italian post office, which
is a major life insurer, and other players "use their balance
sheet", without elaborating.
     ($1 = 0.9084 euros)

 (Reporting by Giuseppe Fonte in Rome and Valentina Za in Milan;
Editing by Keith Weir and Mark Potter)
 ((valentina.za@thomsonreuters.com; +39 02 6612 9526;))