AM Best has affirmed the financial strength rating of A- (excellent) of the Royal & SunAlliance (R&SA) group and its core subsidiaries.
At the same time, AM Best assigned issuer credit ratings of a- to each of the companies. AM Best also affirmed the ratings of “bbb” and “bbb-” of R&SA's subordinated debt and preferred stock, respectively.
AM Best said: "The ratings reflect R&SA's improving risk-adjusted capitalisation and improving operating performance, as well as its excellent business profile. The main offsetting factor continues to be the potential for further reserve deterioration - particularly in the US and the uncertainty as to the scale of future retained profits."
AM Best said that R&SA was likely to maintain the consolidated combined ratio below 100% across the insurance cycle for ongoing businesses due to expense reduction, the ongoing disposal programme and the withdrawal from certain unprofitable lines of business.
