Fitch has placed Royal & Sun Alliance Insurance's 'BBB+' insurer financial strength and 'BBB' issuer default ratings on rating watch positive, after the sale of the Royal & Sun Alliance Insurance Group's US insurance operations and actions to terminate the group's SEC registration.
The positive watch will be resolved when the transaction is approved by regulators and shareholders, expected by end-2006.
Fitch believes the sale of the US operations will address a number of significant risk factors facing the group. The agency has previously noted that the US operations represent a significant risk for R&SA due to the uncertainty over reserving, execution risks associated with the run-off of this business, ongoing litigation risk as well as limited fungibility of capital between the US and non-US operations.
Counteracting these benefits is the immediate financial effect of this vendor-financed transaction, which R&SA expects to result in a pre-tax loss of £443m on disposal.
Recent Related News
R&SA in line for upgrade after US sale
R&SA sells US arm; delists from NYSE
Further re-structuring at R&SA unveiled
