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Ethias bids to reach Solvency II target ahead of schedule as part of recovery plan

Belgian insurer Ethias SA intends to boost its Solvency II ratio to aminimum level of 150% sooner than its original target of 2019.

ActingCEO Benoît Verwilghen said the accelerated target will be part of arecovery plan presented to the National Bank of Belgium to resolve concerns over thecompany's viability. A Belgian newspaper reported earlier in September that the central bank hadasked Ethias to show by the end of September how it could boost its capital by€500 million to €600 million.

The company had a Solvency II ratio of 125% as of June 30.

Verwilghen said Ethias will set out a two-pronged approachto maintaining its position as a stand-alone insurer. The first "axe"will relate to ending the "cumbersome legacy" of the FIRST A savingsinsurance product, which promises policyholders a lifelong annuity of 3.4% onaverage. The other will involve a series of "operational elements thatwill have a positive impact on the market sensitivity we face today."

Insurers across Europe have been hit hard by falling bondyields, which raise the amount of capital they must hold to ensure theirlong-term ability to meet obligations to policyholders.

Verwilghen said the plan will have no "new directimpacts" on staffing, noting that about 180 employees have already takenadvantage of an early retirement plan.

The plan was due to be presented to the board of directorsof Ethias parent Vitrufin SA on Sept. 29, with approval needed before it can besent to the central bank by the Sept. 30 deadline.