The resolution to save Eurolife, the first Italian insurance company to end up in extraordinary administration, is complicated and the date of 30 June, fixed now for the blocking of the redemptions of life policies, it could slip further. Meanwhile, the comparisons between the insurance companies interested in the so-called company stew continue almost daily, while savers and now also i employees they take the field to try to protect themselves.
Novelli (Ivass): difficult solution, but the options are there
The date of the 30nd June it had been set by Ivass (the state agency that oversees insurance) to avoid a sort of assault on the counter, while a rescue plan is being forced to be defined by forced marches. But according to the head of the presidential secretarial office and of the Ivass Council, Roberto Novelli, the issue is so intricate that probably not even the end of June date will be enough to solve it. For the resolution of the Eurovita case “there are various paths open: identifying a solution is already difficult and managing the details is complicated, but the options they are on the table" said Novelli speaking at the Italy Insurance Forum 2023 in Milan, who however could not guarantee whether a solution will be found within the deadline currently set for 30 June. “We are aware that the Redemption block creates discomfort, it is not a measure that we have taken lightly", said Novelli, "we believe that this is the tool to find a solution and restore the trust that this case inevitably has" diminished in the insurance sector.
The perfect storm in which Eurovita found itself
In a difficult context, in which the capitalization of insurance companies fell, due to the devaluation of the portfolio of government bonds hit by the rate hike, Eurovita presented “specific weaknesses”, Novelli explained. So it's not just about the "negative profitability in the life business”, which in this phase is common to the whole system, but also of a “underestimation of liabilities” by the company and a “unavailability of the shareholder”, the private equity fund Cinven, "a recapitalize” Eurolife. The combination of more aggressive risk management and insufficient intervention capacity on the part of Cinven blew up the case: "the first receivership of IVASS ever to take place in the life business", recalled Novelli.
After the savers, the employees also take the field
In recent days the Codacons communicated that he is studying the extremes to act with one class action to protect 353.000 Italian customers of Eurovita. To these were added today also the employees of Life insurers, worried about which of the five companies that have promised to participate in the bailout plan they will be transferred to. We are talking about 230 people, after about ten have already left voluntarily at the first hints of crisis. There destinazione of the transfer is not insignificant, given that three of the five insurance companies (Intesa Sanpaolo Vita, Allianz and Generali) are based in Milan like Eurovita, but the other two, Poste Vita and Unipol, are respectively based in Rome and Bologna.
Almost daily meetings between all the actors to resolve the issue
In recent weeks, several consultants have also taken the field with the aim of accelerating the definition of a plan. The banks have given mandate to Vitale&Co and the extraordinary administration, led by Alessandro Santoliquido, instead asked for the support of kitra and of the study heritage. There is still a lack of a representative of the companies to sit at the negotiating table.
The major technical dossiers on the table
The problems on the table are not easy to solve from a technical point of view.
One of the hypotheses that circulated was the cession to the five companies concerned as many company branches of Eurovita which, however, do not exist at the moment and should be created from scratch with a high risk of litigation by the workers. Sure, they could be found agreements with employees, but time is running out. The alternative could be to instead yield to the five white knights only Life wallets. This route would have the advantage, according to the experts, of fully complying with the legislation but also of enticing employees to join the redeployment proposals in the incoming companies, given that the alternative would be dismissal, at this point fully legitimate. While Eurovita, by activating a single procedure, could consider all employees as redundancies.
Last April 20 was set a meeting at Mef to discuss and plan the rescue of the company, but the meeting has been canceled and has not yet been rescheduled, waiting for the parties to reach an agreement.
