Generali AA negative

ITALIAN insurance group Generali has had its AA rating affirmed by Standard & Poor’s, and has not been downgraded as stated in Friday’s Insurance Day. However, the insurer has had its outlook revised to negative from stable by the rating agency, reflecting increasing pressure on the group’s capitalisation. The insurer has said it will wait for markets to stabilise before issuing updated targets for 2009 to take into account the impact of current economic turmoil. Following a meeting of directors last week, Generali said its original 2009 targets were “formulated in a completely different context from that of today, and have been overtaken by events” and that it would “wait for greater economic and market stability before setting new targets”. The insurer added that financial and economic deterioration has affected its investment return and profit for the current year, although it confirmed a solvency ratio of more than 185% for year-end 2008. Generali said it expects its insurance activities to show an improved technical performance in 2009. Standard & Poor’s has warned that a downgrade could follow if the group does not rebuild its capitalisation position over the next 12-24 months.