Standard & Poor’s (S&P) said the ratings for Royal & SunAlliance Insurance(R&SA) had been unaffected by the announcement that the R&SA Group was reviewing its 71.7% stake in Scandinavian operation Codan.
The ratings agency said Codan accounts for a material part of R&SA's earnings (19.7% of ongoing 2003 operating profits), without which the group's debt servicing capacity would be negatively impacted if no other action were taken.
A full sale would also reduce R&SA's geographic diversity, added S&P.
Were the sale of Codan to be confirmed, S&P said key rating considerations would be details of the sale price, how proceeds were to be used, and the strength of earnings of R&SA's remaining businesses.
