The "financial strength" rating attached to the international Royal & SunAlliance Group was lowered one rung to A+ by S&P late last year.
Royal & SunAlliance chief executive Alan Bradley says the drop was expected and relates to the British-based group’s decision two years ago to return £750 million in excess capital to shareholders.
It does not reflect any change in the New Zealand company’s fortunes, which remain bright, Bradley says.
The new rating moves the group from the bottom of the "very strong" range to the top of the "strong" range.
It also takes into account S&P’s assessment of the minimal impact events associated with the World Trade Center attack will have on the group’s financial strength.
Group losses from the attack are estimated at £200 pounds, about 3% of total market capitalisation.
Despite the downgrade, S&P’s latest report on RSA says the insurer has a strong capitalisation, a healthy market position and earnings are rising. Its ratings outlook for the group was sable.
Specialist insurance rating firm AM Best has reaffirmed its A+ Superior rating for the company.
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