UPDATE 1-Standard & Poor's downgrades Italy's biggest banks, insurer
(Adds rating cut on Generali, details, background on sovereign rating)
MILAN, July 12 (Reuters) - Rating agency Standard & Poor's cut its credit ratings on the two biggest Italian banks, UniCredit and Intesa Sanpaolo, as well as that of insurer Generali, following its downgrade of Italy's sovereign rating.
Ratings for UniCredit SpA, the parent company of UniCredit, and the long-term rating of Intesa Sanpaolo, were lowered to 'BBB' from 'BBB+', both with a negative outlook, the two lenders said on Friday.
Generali was reduced to 'A-' from 'A', with a negative outlook, Italy's biggest insurer said in a statement.
The moves followed an S&P downgrade of Italy's sovereign credit rating to BBB from BBB+, with a negative outlook, on Tuesday.
In a separate statement, S&P said it also downgraded Mediobanca and put on creditwatch with a negative implication 23 Italian lenders, including Mediobanca, Banca Popolare di Milano, Banca Popolare dell'Emilia Romagna , Banco Popolare, Credito Emiliano and Ubi Banca.
"We expect to resolve the creditwatch placements over the coming weeks," said the ratings agency.
Together with its downgrade, S&P revised down its economic outlook for Italy, projecting growth to contract 1.9 percent this year, compared with the government's forecast for a 1.3-percent fall in output. (Reporting by Francesca Landini; Editing by Jennifer Clark, Steve Scherer and Bernadette Baum)