A.M. Best Places Ratings of Royal & Sun Alliance Insurance Group plc Under Review With Developing Implications.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 4, 2003 A.M. Best Co. has placed the financial strength rating of A- (Excellent) of The Royal & Sun Alliance Insurance Group plc (R&SA), United Kingdom, and the "bbb" and "bbb-" ratings of its subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. under review with developing implications. (See list below). The action follows the company's announcement of the forthcoming fully underwritten GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 960 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1,509 million) rights issue and the plans to restructure its U.S. business by entering into a renewal rights transaction with Travelers for its standard personal lines and the majority of its commercial lines business. As expected, 2003 consolidated half-year results reflect R&SA's improving operating performance and successful ongoing execution of its risk reduction program. The proposed restructuring in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. will reduce the company's consolidated risk capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , but it is likely to also reduce the business profile of the U.S. R&SA subsidiaries (see related September 4, 2003, A.M. Best press release on Royal & Sun Alliance USA Insurance Pool and the Royal Surplus Lines Insurance Company). A.M. Best aims to resolve the under review situation shortly as it continues discussions with R&SA's management to assess the final details and execution timeframe of the renewal transaction with Travelers as well as the potential strengthening of provisions by up to GBP 800 million (USD 1,257 million) in the third quarter. For a complete list of Royal & Sun Alliance Insurance Group's debt and financial strength ratings, please visit www.ambest.com/press/090406royalsunuk.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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