Insurance Daily | April 2023

400.000 clients and dozens of distribution agreements with leading financial networks and banks: this is the outcome of the work of an excellent sales team made of Italian professionals who put their expertise at the service of a very ambitious project which, however, has fallen through.

Insurance companies notoriously ought to maintain an adequate solvency position, that is the ratio of own funds to SCR (Solvency Capital Requirement) at a given date.

Thus, following the fall of the ratio below the permitted levels and the appeal of IVASS (Institute for the Supervision of Insurance) to inject new capital, Cinven, private equity firm and Eurovita’s main shareholder, declared itself unable to provide enough resources to save the company.

Then, Cinven opted for passing the baton to the private equity fund JC Flowers, itself Eurovita’s shareholder until 2017. In fact, JC Flowers had seemed willing to reacquire the company for about 300 million, but eventually the negotiation fell through.

Cinven therefore made a €100m capital infusion, not enough to raise the Solvency II ratio or for Eurovita to avoid being placed under temporary administration. On 31 March, Eurovita’s temporary administration has been transformed into extraordinary administration, currently in the hands of Alessandro Santoliquido.

Last week, a meeting was supposed to be held at the Ministry of Economics to accelerate the bailout of Eurovita, with leading banks and distributors (Sparkasse, FinecoBank, Credem and Banca Fideuram) and the main five insurance groups on the market (Poste Italiane, Intesa Sanpaolo, Generali, Unipol and Allianz). However, the meeting, aimed at securing Eurovita’s 400.000 clients, has been postponed until further notice.

Ultimately, this is a very bad story which involves a class of products – life insurance policies and unit linked insurance plans – employed by Italians savers to prevent risk. And, to make matters worse, within a chronically underinsured market, as the Italian one. 

While the commissioner Alessandro Santoliquido (one of the best and most esteemed professionals of the insurance sector) works to save the company, a consideration springs to mind.

It is a necessary consideration, especially in light of what sources close to the dossier have reported to MF-Milano Finanza. In fact, Eurovita’s current extraordinary administration might claim damages from the previous administration – among them are the administrative bodies of the company, which have in the meantime been disbanded; but also from Cinven, the private equity firm that chose to not recapitalize the company. 

The consideration is the following: in the end, private equity funds gave the market a bad impression of themselves and, unfortunately, of their sector.

And this also affects the majority of private equity funds that work well, bring new life and relaunch businesses.

Unfortunately, while very much stereotyped, the image of hedge funds and private equity funds – speculative and unscrupulous, which acquire companies, merge them, place them on the market, always at default risk and always at the expense of consumers – inevitably brings to mind disquieting characters, such as Michael Douglas’ Gordon Gekko.

Luckily enough, Alessandro Santoliquido, long-standing manager and restorer, with his unique professional and human qualities is giving hope to Eurovita’s 400.000 clients waiting on the edge of their seats.

Nicola Ronchetti