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Moody's reviewing Unipol Gruppo, unit for downgrade

Moody's on May 30 upgraded Unipol Gruppo SpA's senior unsecured debt and long-term issuer ratings to Ba1 from Ba2, following the launch of a new cross-sector methodology for assigning instrument ratings for insurers.

Under the new methodology, the rating agency modified its guidance for rating certain insurance holding company instruments and now applies narrower notching for certain insurance groups domiciled in locations with enhanced regulatory supervision at a groupwide level.

Moody's said the upgrade reflects its view that the Solvency II regulatory regime provides such enhanced regulatory supervision on Italian insurers, such as Unipol.

At the same time, Moody's placed Unipol's and unit UnipolSai Assicurazioni SpA's Baa2 insurer financial strength rating on review for downgrade, following a recent similar action on Italy's Baa2 sovereign debt rating, saying it considers the group's key credit fundamentals as linked to the economic and market conditions in Italy.

The placement also reflects the group's direct exposure to Italian sovereign risk through both its investment portfolio and business profile, the agency noted.