Share prices of insurers tumble up to 4% as Italian political crisis takes its toll
The share prices of major Europe-based insurers have taken a hit over the political crisis in Italy.
AXA bore the brunt of the political turmoil, falling 4% between close on Monday and Tuesday’s opening.
Over the same period, Allianz’s share price fell 3.3% and Zurich fell by 3.5%.
Italian insurer Generali was another victim, and saw it’s share price fall 3.4% over this period.
While there was slight improvement or stabilisation yesterday, reports of a snap election, and fears that Eurosceptic parties could see their share of the vote rise led to a second hit on share prices.
Between Tuesday’s close and this morning AXA’s share price had fallen 1.6%, Zurich 0.8% and Allianz 0.9%. Generali has mostly stabilised today.
Like banks, insurers hold government bonds as capital, meaning any threat to government stability hits shares.
The crisis was caused after the two populist parties of Italy, the Eurozone’s fourth largest economy, on Sunday failed to form a coalition government.
The situation was further exacerbated when it became clear ex-IMF economist Carlo Cottarelli, mooted as a potential ‘stop-gap’ president, had no support from either party, raising the prospect of a second set of elections since March.