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LONDON—Insurers in Spain and Italy would be hit harder than those elsewhere in Europe if Greece left the eurozone because they hold more risky sovereign and bank debt, ratings agency Fitch Ratings said on Thursday.
If Greece quits, Fitch would likely put insurers from the two countries, led by Italy's Assicurazioni Generali S.p.A. and Mapfre S.A. of Spain, under rating watch negative, meaning the risk of a credit downgrade had risen, the agency said.
"Italian and Spanish insurers are most exposed to a Greek exit from the eurozone—through the contagion effect it could have on Italian and Spanish sovereign and bank debt," Fitch analyst Federico Faccio wrote in a note.
A Greek exit would likely push up yields on the debt of Spain, Italy and other heavily-indebted eurozone countries because of fears they too could be forced out of the single currency.
Bank debt in affected countries would also likely rise as many lenders in the most heavily-indebted countries rely on state support.
Europe's big insurers have little direct exposure to Greek sovereign debt as they wrote down most of their holdings under a debt renegotiation deal last year.
Analysts have said the sector's investments in Greek government bonds were in any case small relative to their overall portfolios.
German and British life insurers are "largely sheltered" from a potential Greek exit, while French insurers have a manageable exposure, Fitch said.
MUNICH (Reuters)—Munich Reinsurance Co. is on course for a net profit of €2.5 billion ($3.28 billion) this year as the risk of further painful writedowns on eurozone government bonds diminishes, it said on Tuesday, pushing its share up by more than 3%.