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UPDATE 2-Italy's Unipol group confirms dividend targets despite Covid-19

(Recasts after conference call, adds details, CEO comments)

MILAN, Nov 13 (Reuters) - UnipolSai and parent Unipol confirmed their dividend policies on the back of strong capital positions despite an uncertain economic outlook caused by the COVID-19 pandemic, the Italian insurer’s head said on Friday.

Under a three-year plan to 2021, Italy’s second largest insurance group has targeted an overall dividend payout totalling 1.9 billion euros ($2.25 billion) for both companies.

Unipol CEO Carlo Cimbri, who also serves as UnipolSai’s chairman, told analysts the group complied with recommendations by the European and Italian insurance watchdogs not to pay dividends this year to preserve cash during the coronavirus emergency.

“We have capital and financial resources to pay dividends as soon as we are allowed to do it, and in line with our business plan,” Cimbri said.

Following the regulator recommendation, Unipol suspended its dividend on 2019 results, while UnipolSai, 85% controlled by the parent, paid out given that the cash would largely remain within the group..

Bologna-based Unipolsai said its solvency ratio, a key measure of financial strength, improved to 284% at the end of September from 272% at the end of June thanks to a narrowing of the spread in Italian government bonds. Cimbri added the solvency ratio had increased further, touching 297% on Nov. 6.

European insurers are required to book investments in sovereign holdings at market value in order to calculate capital and solvency ratios.

UnipolSai on Friday reported a 37.7% rise in nine-month net profit, in line with analyst expectations, lifted by earnings in its property and casualty business, its highest revenue earner. The insurer further cut its domestic government bond holdings to 42.9% of its overall financial portfolio from 50.1% in 2019 to shield its capital reserves.

$1 = 0.8470 euros $1 = 0.8460 euros Reporting by Andrea Mandalà; editing by Mark Potter, Kirsten Donovan