June 18, 2020 / 8:35 AM / 17 days ago

Italy's insurance watchdog says closely monitoring solvency and liquidity ratios

ROME, June 18 (Reuters) - Italy’s insurance watchdog IVASS said on Thursday it had started monitoring solvency and liquidity ratios of the country’s insurers from mid-March, after the pandemic and an ensuing rout on financial markets hurt the industry.

IVASS said checks were being carried out on a weekly basis for larger players and that it demanded action if an insurer’s solvency ratio, a key indicator of financial strength, fell below 130%.

The regulator has asked Cattolica Assicurazioni, Italy’s fifth-largest insurer whose top shareholder is Warren Buffett’s Berkshire Hathaway, to bring forward a planned capital hike after its solvency position deteriorated.

The average solvency ratio of Italian insurers stood at 210% at the end of March from 235% at the end of December, IVASS said.

Its chief Stefano De Poli added the situation had lately improved thanks to lower risk premiums on Italian government bonds and a general recovery on financial markets, but he added uncertainty remained high.

Reporting by Stefano Bernabei, writing by Valentina Za, editing by Giulia Segreti

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