Corona pandemic has brought avalanche changes in business and its impact is widespread. The economy of the whole world is suffering making a huge shrink in demand. Every business is using all their tools and techniques to cope with the disaster. Moreover, the insurance business is not left unimpacted.
Insurance businesses are facing a huge crisis regarding claims, premiums, and restrictions by controlling authorities. Reuters has reported that Cattolica Assicurazioni will change its status of the cooperative insurer into a joint-stock company on Friday. Also, it will have a tie-up with Generali.
According to the rules, there should be ⅔ shareholder agreement on the conversion Generali is going to buy 24.4% of the share of Cattolica Assicurazioni making it the biggest shareholder of the company. The investment includes asset management, healthcare, the internet of things, and reinsurance.
The conversion needed vote of each shareholder no matter what is the size of their share. This benefit is given to the shareholders as the company was a cooperative one. Reuters has said that COVID 19’s impact has caused a great loss to the insurance company, and due to that their asset value has fallen significantly.
Insurance regulator IV ASS instructed Cattolica to raise around 592.8 million dollars in the capital after the effects of the pandemic. Under the new agreement, Generali is going to subscribe to a 300 million euros reserved capital increase in Cattolica.
Generali has also the choice of a separate increase of up to 200 million euros. Moreover, this is surely going to boost the economic foundation of the company in this tough time.