The Board of Directors of Cattolica Insurance mandated the group's management to prepare a plan for a capital increase of 500 million euros. The first step in this direction will be next Saturday's shareholders' meeting, which will have to approve the delegation to the Board itself in view of the operation. This is what we read in a note from the insurance company, which thus responds to solicitations recently arrived from IVASS.
As prescribed by the Supervisory Authority, Cattolica will not use the resources acquired with the increase to finance the expansion of the group, but to strengthen the capital position, weakened by the coronavirus crisis.
In detail, in response to some requests for clarification received from Consob, the company reports that the group has a solvency ratio of 133%, while the parent company reaches 141%. The data refer to June 12 and are both above the regulatory threshold of 100%.
The increase of 500 million “would bring the Cattolica Group's solvency ratio to approx 172% – continues the note – well above the thresholds of the Risk Appetite System and within the range of target values expected at the time of presentation of the 2018-2020 Business Plan (160%-180%)".
On the other hand - as noted by Ivass itself - the most worrying situations are those of two companies controlled by Cattolica, i.e. Bcc Life e True Life, whose solvency ratio stands just above the limit, at 111 and 110% respectively.
By contrast, the capital position of the other two main subsidiaries of the group was much better, Lombard Life (solvency ratio at 259%) e Your Insurance (157%).
Also with regard to the subsidiaries, the capital increase "will restore the risk appetite thresholds, revised upwards in order to protect the companies from any new adverse movements on the financial markets - concludes the note - Actions are planned such as to bring the solvency ratio estimated at the same date at least at a value of 150% for all the companies of the group".
