MILAN (Reuters) -Italy's insurance watchdog has told life insurer Eurovita to quickly boost its capital reserves by around 250 million euros ($250 million), prompting its owner British private equity firm Cinven to seek a sale, sources said.
Three sources close to the matter said Cinven, which last year unsuccessfully attempted to sell Eurovita, was again working with advisers Deutsche Bank and Citi to find a buyer.
All parties involved declined to comment.
A sale must be clinched quickly to meet regulator IVASS' demands that Eurovita, a top 20 Italian life insurer, acts swiftly to boost its solvency ratio, a key measure of financial strength for insurers, two of the sources said.
Eurovita said in its 2021 financial report its solvency ratio at the end of last year had fallen below a "soft limit" tolerance threshold set at 150%, adding it was taking steps to bring it back above that level.
Eurovita said in the report IVASS had conducted a number of audits late last year focusing first on investments and financial risks, and then widening checks to cybersecurity and money laundering risks.
IVASS conducted a follow-up early this year to see what the company had done to address shortcomings highlighted by supervisors in the way it calculates its reserves and solvency ratio.
The Italian press reported last year that Cinven had halted the process to sell Eurovita after bids fell short of a valuation of 600-700 million euros the British firm had sought for the asset.
Italian daily MF reported earlier this month specialist life insurer Athora was eyeing Eurovita, after it entered the Italian market last year with the acquisition of mid-sized player Amissima Vita.
Like other Italian insurers, Eurovita has seen premiums shrink during the pandemic. Demands by IVASS for insurer Cattolica to raise capital eventually led to its takeover by bigger rival Generali. ($1 = 0.9993 euros)
(Reporting by Valentina ZaEditing by Keith Weir)