GIO's credit rating goes up

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Standard and Poors has put GIO's credit rating up to AA following AMP's decision to sell the business to Royal & SunAlliance.

Tuesday, October 2nd 2001, 9:19PM

Standard & Poor’s has raised the insurer financial strength rating on GIO General New Zealand from A to AA-. The new rating has been placed on creditwatch negative from creditwatch developing.

At the same time S&P affirmed the insurer financial strength rating of AA-GIO Insurance at BBB+/Stable/—. The rating actions are based on explicit support from new parent company, Royal & SunAlliance.

RSA has acquired AMP’s New Zealand general insurance business, including GIO General New Zealand and GIO’s 50% share of joint-venture business with New Zealand Automobile Association, AA-GIO Insurance, for $60 million.

While the underwriting activities have been transferred to RSA, AMP retains a role in distribution and customer management. With this acquisition RSA has become the second largest general insurer in New Zealand, ranking behind NRMA-owned State Insurance.

RSA’s New Zealand ratings were placed on creditwatch with negative implications last month following similar actions taken at the RSA group level. The rating actions were based on a review by S&P of the potential effect on capital adequacy of the group’s estimated net exposures stemming from the World Trade Center tragedy.

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