Best’s News & Research Service - December 14, 2022 11:03 AM (EST)
AM Best Affirms Credit Ratings of RSA Insurance Group Limited’s Subsidiaries
- December 14, 2022 11:03 AM (EST)
London //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Royal & Sun Alliance Insurance Limited (RSAI) (United Kingdom), RSA Insurance Ireland DAC (RSAI Ireland) (Ireland), RSA Luxembourg S.A. (RSAL) (Luxembourg), Royal & Sun Alliance Reinsurance Limited (RSA Re) (United Kingdom) and The Marine Insurance Company Limited (MIC) (United Kingdom). All five entities are wholly owned subsidiaries of RSA Insurance Group Limited (RSAIG), a non-operating holding company, ultimately owned by Intact Financial Corporation (IFC). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect RSAIG’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as the group’s adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also consider, in the form of lift, the support of its parent company, IFC. RSAI, RSAI Ireland, RSAL and RSA Re’s ratings factor in their strategic importance to and integration within the RSA group; MIC’s ratings consider the significant reinsurance support it receives from RSAI, an affiliated company.
RSAIG’s balance sheet strength is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the balance sheet strength assessment reflects the group’s robust financial flexibility and good quality of capital.
RSAIG has a track record of modest underwriting results in its U.K. and international operations, its principal portfolio following the transfer of Scandinavian and Canadian business outside the RSA group in June 2021. AM Best expects underwriting performance to steadily improve despite challenging conditions in RSAIG’s main U.K. market, helped by a focus on risk selection and ongoing portfolio pruning. Investment income supports overall earnings with a positive, albeit modest, contribution.
RSAIG benefits from a strong market position and well-recognised brand in the U.K. non-life insurance market in personal and commercial lines of business. While the company’s business is concentrated in the competitive U.K. insurance market, this geographic concentration is mitigated partially by good diversification by line of business and by a profitable and well-diversified international portfolio. Going forward, moderate premium growth is expected, with RSAIG expected to leverage on IFC’s pricing and data analytics in the medium term.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.