Standard & Poor’s said the ratings for Royal & SunAlliance Insurance and its subsidiaries were not affected by the drop in first quarter profits.
It said the group operating result had already been factored into R&SA’s ratings.
Underlying operating performance continues to improve, said S&P, reflecting the move to reduce the volume of premiums written through the disposal of unprofitable lines of business.
S&P said it expected retained earnings at R&SA to improve substantially in 2004, and for the group to demonstrate earnings capacity consistent with the current ratings going forward. It also expects R&SA to rebuild capital adequacy to a strong level in 2004.
The negative outlook on the rating continues to reflect the execution risks in the restructuring of R&SA’s US operations, and the possibility that its US-related losses could prevent the insurer from meeting S&P's expectations
