"Given significant market and fundamental uncertainties with regards to sovereign debt, the possibility of further deterioration in the capital market performance of sovereign debt could ultimately more materially impair the insurers' capital positions," Fitch said in a report on Tuesday.

Insurers typically hold sizable amounts of sovereign bonds in their portfolios and the deepening euro zone sovereign debt crisis is weighing on the holdings.

Fitch said if the sovereign debt outlook improved and stabilised the insurer ratings could be upgraded if their capital ratios also improved.

Generali has around 50 billion euros ($65.43 billion)of Italian government debt.

Fitch said it had cut Generali's rating to "A-" from "AA-" while cutting Fondiaria-SAI to "BB-" from "BB+".

Analysts believe that Fondiaria's solvency margin a measure of an insurer's capital has fallen close to the regulatory minimum of 100 percent, from 111 percent on Nov. 1.

Last week Standard & Poor's placed various insurers on credit watch negative as a result of its threat to downgrade the ratings of 15 euro zone countries.

Fitch also cut its rating on Societa Reale Mutua di Assicurazioni to "BBB+" from 'A-' and ITAS Mutua to "BBB" from 'BBB+'