Insurer set to increase penetration in top-end property market

Royal & Sun Alliance has said an upgraded rating by Standard & Poor’s will widen its ability to write high-end business.

The company’s financial strength rating was upgraded from an A- to an A with the agency stating the outlook on all main operating entities was stable.

S&P credit analyst Nigel Bond said: "The ratings reflect our strong assessment of RSA's enterprise risk management (ERM), which in turn provides us with greater confidence in the group's underwriting cycle management and its ability to produce consistently positive earnings."

Paul Donaldson, managing director of R&SA's broking business, said the rating was a great vote of confidence by an independent agency and will allow the company to grow its business.

He said: “A full A rating is regarded by major financial institutions as very solid. Were in a good spot now that we’ve got this there should be no quibble.”

Donaldson said the company wants to acknowledge its top-end clients that have continued to do business with R&SA and the upgraded rating should renew their confidence.

A spokesman added: "This will enable us to go after business we couldn't write beforehand. It is also a massive tick in the box for our strategy to pursue phased rate increases across our commercial lines business."

In September, sources said the insurer's A- rating could pose a potential stumbling block in its ability to secure deals with high value commercial property investors. Many high-end clients require a AAA rating for their insurance. As a rsult, R&SA was linked with American Insurance giant, Berkshire Hathaway.

Donaldson would not go into details about the company’s plans for the future, but promised 2008 will be “full of surprises.”