Generali: IVASS launches an inspection into asset management

IVASS visits Generali’s headquarters. The insurance sector regulator has launched an inspection in Trieste, turning the spotlight on a specific business segment: asset management and its links with Conning. According to sources close to the case, this is a routine inspection that the Authority routinely carries out on the entities it supervises.

The subject under discussion, however, is undoubtedly a key issue for the Leone, and not merely for purely industrial reasons. Asset management has, in recent years, been a significant factor both as a further driver of growth and as a specific sector requiring monitoring to ensure the best possible protection of Italians’ savings. Proof of this is the agreement with Natixis that was never finalised, due to the barriers erected around a business considered key by shareholders and institutions. This is therefore the issue that IVASS will be tackling over the next six months, given the amount of time the Authority will be devoting to the matter.

A period during which another key battle will also come to a head, the ultimate outcome of which will be the shareholding structure of Generali. Namely, the takeover bid by Intesa Sanpaolo for Mps, which in turn has a knock-on effect on Trieste. Just a couple of days ago, the Competition Authority also commented on this transaction, announcing the launch of the necessary investigation. In doing so, it clarified a concept that is significant in its own right, namely that Intesa Sanpaolo, ‘in the event of “taking over” the stake currently held by Mps (via Mediobanca)’, would not ‘be able to exercise de facto control over Generali. In particular, Intesa would not have the power to appoint, independently (that is, without the votes of other shareholders), the majority of the members of Generali’s board of directors through the list voting mechanism’.

This last point is a key factor when considering the deal as a whole. The competition authority effectively tends to rule out the possibility that Intesa could influence the future management of Leone. Nevertheless, it cannot avoid assessing the potential risks of market concentration in the shared business segments, namely asset management and the non-life and life insurance sectors. Whilst the assessment for the first two (with the exception of the health insurance sector) may be relatively straightforward, the situation regarding life insurance could be different. The Competition Authority highlights the need to assess ‘possible competition concerns arising from the structural links between Intesa and Generali, as well as the risks associated with the exchange of sensitive information, given the significant market position of the two institutions in the markets for the underwriting of life insurance policies in Classes I, III and VI’.

And it is precisely this aspect, according to some sources, that is said to have contributed to speeding up the integration of Alleanza – which specialises specifically in life insurance – whose representatives will join the group’s board of directors on 30 September. An independent Alleanza could have represented, in the event of a potential divestment of the asset, a relatively straightforward way of avoiding excessive concentration in the sector between the two companies. Financial sources point out, however, that if the Competition Authority were to impose remedies, it would impose them on the party carrying out the transaction – and thus take action within its scope – rather than on the party ‘affected’ by it.