Societa Cattolica di Assicurazione

Following a high dividend payout and the recent acquisition and consolidation of JVs with BBPM, Cattolica's capital adequacy, as measured by S&P Global Ratings' capital model, shows a small deficiency at the 'BBB' confidence level. The negative outlook mirrors that on Italy. We could lower the ratings on Cattolica if we lower our long-term rating on Italy. We could revise our outlook to stable if we revise the outlook on Italy to stable. Italian GDP to increase by 0.1% in 2019 and 0.5% in 2020. Long-term Italian government bond yields to average 2.5%-3.0% over 2019-2020. The unemployment rate in Italy to decline in the next three years, but remain more than 10%. With over €31 billion in total invested assets

...S&P Global Ratings expects Societa Cattolica di Assicurazione (Cattolica) to maintain its leading positions in the life, and in particular, the non-life Italian insurance markets. Cattolica is a long-established insurance group in Italy, and recent joint ventures (JVs) with Banco BPM (BBPM) have further enhanced its well-diversified insurance portfolio and multichannel-distribution strategy. We estimate that Cattolica will maintain strong technical results, particularly in motor insurance, reporting a non-life combined ratio in line with the five-year average of 95%. We estimate that Cattolica's year-end net profits before minorities and impairments will increase gradually to 180 million in 2020, up from 137 million at year-end 2018, owing to the improving profitability of the life portfolio and its partnership with BBPM. We expect Cattolica will maintain solid regulatory solvency levels. Cattolica's Solvency II ratio has displayed some volatility over the past 18 months, mostly owing to...

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