MILAN (Reuters) - Rating agency Standard & Poor's cut its credit ratings on the two biggest Italian banks, UniCredit (>> UniCredit SpA) and Intesa Sanpaolo (>> Intesa Sanpaolo SpA), as well as that of insurer Generali (>> Assicurazioni Generali SpA), following its downgrade of Italy's sovereign rating.

Ratings for UniCredit SpA, the parent company of UniCredit, and the long-term rating of Intesa Sanpaolo, were lowered to 'BBB' from 'BBB+', both with a negative outlook, the two lenders said on Friday.

Generali (>> Assicurazioni Generali SpA) was reduced to 'A-' from 'A', with a negative outlook, Italy's biggest insurer said in a statement.

The moves followed an S&P downgrade of Italy's sovereign credit rating to BBB from BBB+, with a negative outlook, on Tuesday.

In a separate statement, S&P said it also downgraded Mediobanca (>> Mediobanca Group) and put on creditwatch with a negative implication 23 Italian lenders, including Mediobanca, Banca Popolare di Milano (>> Banca Popolare di Milano), Banca Popolare dell'Emilia Romagna (>> Banca Popolare dell'Emilia Romagna), Banco Popolare (>> Banco Popolare Societa Cooperativa), Credito Emiliano (>> Credito Emiliano SpA) and Ubi Banca (>> UBI Banca Scpa).

"We expect to resolve the creditwatch placements over the coming weeks," said the ratings agency.

Together with its downgrade, S&P revised down its economic outlook for Italy, projecting growth to contract 1.9 percent this year, compared with the government's forecast for a 1.3-percent fall in output.

(Reporting by Francesca Landini; Editing by Jennifer Clark, Steve Scherer and Bernadette Baum)