Fitch Rates Standard Life Assurance IFS 'A'/IDR 'A-'.LONDON -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has today assigned UK life insurer Standard Life Assurance Limited ('SLAL') an Insurer Financial Strength ('IFS') rating of 'A' and an Issuer Default rating ('IDR') of 'A-' (A minus). The agency has also assigned an IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. 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. of 'BBB+' to Standard Life plc, which is the parent company of SLAL and the new top holding company for the Standard Life group. The Outlook on all three ratings is Stable. At the same time, Fitch has upgraded Standard Life Assurance Company's ('SLAC') IFS rating to 'A' from 'A-' (A minus) and its IDR to 'A-' (A minus) from 'BBB+'. Fitch is simultaneously withdrawing SLAC's ratings, following the transfer of its long-term business to SLAL, in accordance with the demutualisation scheme. In addition, Fitch has upgraded the ratings on Standard Life's 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". issues to 'BBB+' from 'BBB' (see full list of ratings below). The issuer under each of the bonds has been substituted and the issuing entity is now Standard Life plc and, in each case, there is a subordinated guarantee in respect of the bonds from SLAL. The rating actions follow the successful completion of the demutualisation process. Standard Life's ratings reflect its resilience in maintaining a strong business position as a leading player in the UK life and pensions market. The ratings also reflect the much-improved capital position and the significant improvements in profitability. For full year 2005, UK life and pensions sales on an annual premium equivalent ('APE') basis increased 3% to 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. 908 million, with a market share of 8.4%. Within the IFA Immunofluorescent assay (IFA) A blood test sometimes used to confirm ELISA results instead of using the Western blotting. In an IFA test, HIV antigen is mixed with a fluorescent compound and then with a sample of the patient's blood. market, which is Standard Life's core distribution channel, it had a market share of 11.1%. For 2006, Standard Life's first quarter sales in the UK amounted to a robust GBP263 million, up 13% from a year ago. While this growth rate was lower than those reported by its peers, the group continues to have a strong market share. Over the last two years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time capital position has improved significantly. At YE05, SLAC's total capital resources rose to GBP7.1 billion, covering the capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. of GBP2.9bn by 2.4x. Fitch notes that the successful raising of equity capital of GBP1.1bn as part of the demutualisation exercise has further increased the group's capitalisation. Profitability has continued to improve, with an average UK new business margin of 9.9% (on an APE basis) for Q106, which is a significant improvement from the 3.0% achieved for FY05 and a turnaround from the negative 15.7% reported for FY04. However, Fitch notes that profitability, although improving, still remains below that of peers. The group has also announced a 2007 target of a 9% to 10% post tax operating return on opening embedded value Embedded Value A common valuation measure used outside North America particularly in the insurance industry. It is calculated by adding the adjusted net asset value and the present value of future profits of a firm. . Fitch considers this target to be positive evidence of the company's continuing focus on profitability. The agency's view is that the group faces a significant challenge to further improve its operational performance and profit margins amid a competitive environment. If the group is successful in achieving improving profitability while at least maintaining its business position and capital position, then there could potentially be upward pressure on the ratings. Conversely, there could be downward pressure if there were to be a weakening of profitability, business position or capital position. Standard Life plc --GBP500m 6.75% bonds, undated un·dat·ed adj. 1. Not marked with or showing a date: an undated letter; an undated portrait. 2. : upgraded to 'BBB+' from 'BBB'; --EUR750m 6.375% bonds, due 2022: upgraded to 'BBB+' from 'BBB'; --EUR360m 5.314% bonds, undated: upgraded to 'BBB+' from 'BBB'; --GBP300m 6.546% bonds, undated: upgraded to 'BBB+' from 'BBB'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure. |
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