...Stable Sector and Rating Outlooks: The rating and sector outlooks for the Italian insurance market are stable, reflecting Fitch Ratings' expectations that insurers' profit and capital adequacy will be resilient amid challenging operating conditions in Italy. Fitch expects Italian insurers to achieve positive underwriting results in non-life in 2015, despite softening prices in the dominant motor business. In addition, the reduction in minimum guaranteed returns to zero makes profits and capital of Italian life insurers less sensitive to changes in interest rates. Asset Concentration Risk Persists: Italian insurers hold significant amounts of Italian government and corporate debt in their investment portfolios, largely backing insurance liabilities. This represents a significant concentration risk on the asset side and, compounded with their exposure to the domestic economy, strongly links their ratings to the Italian sovereign. Any change to Italy's rating or Outlook (BBB+/Stable) could...
