Italy's Poste CEO says firms to use balance sheet in Eurovita rescue
MILAN (Reuters) -Italian banks and insurers that are being called upon to rescue struggling life group Eurovita will help by using their balance sheet, Poste Italiane's CEO said on Thursday, without elaborating.
Matteo Del Fante said in response to a question during a post-results analyst call that it was reasonable to assume that the Italian post office would help to bear the cost of a Eurovita rescue, which is estimated at around 400 million euros, based on its 20% share of the life insurance market.
The Poste Italiane chief executive said all the main Italian insurers and banks distributing products by Cinven-owned Eurovita were working on a possible solution.
"Everybody would use their balance sheet instead of funding a recapitalisation," he said, adding he could not explain more.
After rapidly expanding following its acquisition by Cinven in 2017, Eurovita ran into trouble when rising interest rates prompted customers to redeem low-yielding life policies to chase higher returns in assets such as government bonds.
Italian authorities have taken over management of Eurovita and are working on brokering a rescue after strong-arming Cinven into pumping 100 million euros of capital into the insurer.
The Bank of Italy's latest Financial Stability Report last week said that redemptions in the life insurance sector amounted to 85% of premiums at the end of March, compared with 53% as of the end of December.
For insurers that rely on banks and financial advisers for their distribution, redemptions totalled 119% of premiums.
(Reporting by Valentina Za; Editing by Gianluca Semeraro and Alexander Smith)