Fitch Ratings has expressed concerns over Royal & SunAlliance's (R&SA) likely operating performance over 2003.
In response to Thursday's results announcement, Fitch expressed concerns over R&SA's reserve adequacy, solvency margins and credit losses. Although the ratings remain unchanged, the agency said it is concerned about the company's likely operating performance over 2003.
Fitch raised concern over R&SA's reserve strengthening. Fitch said its strengthening was £119m higher than anticipated and no reassurances were given by senior management that the group is reserved at the "best estimate" level.
Fitch also said that the group meets its solvency margin by 1.3 times. The agency added that operating below twice the regulatory minimum solvency margin is a sign of capital weakness.
A Fitch statement said: "The agency added that failure to show tangible progress during the next three to six months could lead to further negative rating actions."
