The Board of Cattolica Insurance met in an emergency on Sunday 31 May and “has given a mandate to the management to prepare a plan within the required times, in order to strengthen the solvency of the group”. The company communicates it in a note, thus responding to the letter dated May 27 with which IVASS, the Insurance Supervisory Institute, had asked the company to strengthen its assets with a capital increase of 500 million to be launched by 30 September.
The amount of the operation – which will be approved by the shareholders' meeting on 26/27 June – is equal to approximately two thirds of the current capitalization of the group, which on the Stock Exchange, at the close of last Friday, was worth 757 billion. The authority had motivated the request by underlining a collapse of the Solvency ratio to 130% and below the minimums in the Vera Vita and Bcc Vita jvs due to the strong exposure to BTPs.
In the letter, IVASS had also requested the presentation of a plan by 25 July on how to rebuild the solidity of the insurance group. In this regard, Cattolica's Board of Directors explains that "the topics concerning the capital position had already been dealt with in the board of directors of the parent company", such as "a capital increase of 200 million combined with the issue of a similar amount of instrument subordinate Tier 1”. These moves, according to the company, would have been sufficient to reach an adequate level of capitalisation, enabling the planned acquisitions to be carried out by the end of next year.
In addition, capital strengthening measures had already been defined for BCC Life – explains the Board of Directors – which presented the most critical solvency situation”, with a Solvency ratio of 25%. As for True Life, countermeasures have not yet been studied, but the management expects "to identify them by the end of June".
To date, "the Solvency ratio of the Group is equal to 122% (vs. 147% of 31 March) – continues the note – while that of the parent company is 130%”. The figure is therefore lower than the company's expectations, which aimed to keep the indicator between 160 and 180%.
Meanwhile, the former managing director, Alberto Minali, after resigning as director on the evening of 29 May, has sent a writ of summons in which he asks the company for compensation of 9,6 million euros, motivated by the "alleged lack of a just cause". revocation of his powers, which took place on 31 October 2019. Cattolica deems the claims "unfounded", "which will be the subject of an adequate response in the defence".
