AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of Royal & Sun Alliance Insurance Limited (RSAI) (United Kingdom), RSA Insurance Ireland DAC (RSAI Ireland) (Ireland), RSA Luxembourg S.A. (RSAL) (Luxembourg), Royal & Sun Alliance Reinsurance Limited (RSA Re) (United Kingdom) and The Marine Insurance Company Limited (MIC) (United Kingdom). All five entities are wholly owned subsidiaries of RSA Insurance Group Limited (RSAIG), a non-operating holding company, ultimately owned by Intact Financial Corporation (IFC) (Canada). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect RSAIG’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as the group’s adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also consider, in the form of lift, the support of its parent company, IFC. RSAI, RSAI Ireland, RSAL and RSA Re’s ratings factor in their strategic importance to and integration within the RSA group; MIC’s ratings consider the significant reinsurance support it receives from RSAI, its intermediate parent company.

RSAIG’s balance sheet strength is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet strength assessment considers RSAIG's improved quality of capital in recent years, following several de-risking actions that were pre-funded largely by capital injections from the group’s ultimate parent.

RSAIG has a track record of modest underwriting results in its UK and international operations, its principal portfolio following the transfer of Scandinavian and Canadian business outside the RSA group in June 2021. AM Best expects underwriting performance to improve steadily despite challenging conditions in the UK personal lines market, helped by a focus on risk selection and ongoing portfolio pruning. Investment income is expected to support overall earnings with a positive, albeit modest, contribution.

In the second half of 2023, RSAIG announced that it acquired Direct Line Insurance Group plc’s brokered commercial lines operations (circa GBP 500 million of premiums), which will result in the transfer of renewal rights, brands, approximately 800 employees, and technology capabilities to RSAIG, and that the group intends to exit its direct UK personal lines operations (circa GBP 700 million of premiums). The bulk of the UK personal lines exit is expected to be achieved through the non-renewal of partner and broker contracts, which expire over the course of 2025 and 2026. As such, the impact on the company’s business mix and results will be felt gradually over the medium term. Despite the corporate actions, RSAIG maintains a strong market position and a well-recognised brand in the UK non-life insurance market, as well as a profitable and well diversified international portfolio. In AM Best’s opinion, the corporate actions have a neutral impact on the group’s business profile assessment.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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