Standard & Poor's (S&P) has lowered the insurer financial strength and counterparty credit ratings of Calliden Insurance Limited (CIL) to BBB- from BBB, removed the insurer from negative credit watch and revised its outlook to stable.

At the same time, CIL's listed parent the Calliden Group asked S&P to withdraw the rating.

Calliden Group acquired the Australian Unity General Insurance business for $62.5 million in August this year and rebranded it as CIL, with Australian Unity taking a 13% stake in the group as part of the deal. S&P placed CIL's BBB rating on CreditWatch when the acquisition was announced on 11 July.

S&P Director of Insurance Ratings Michael Vine says the revision of the rating was prompted by the CreditWatch and the change of ownership. "Usually the CreditWatch should be resolved or refreshed within 90 days."

Calliden Group CEO Nick Kirk says CIL's rating was a legacy of the takeover.

"We inherited one entity in the group that had a rating in the past."

He says Calliden's request to withdraw the rating automatically prompted S&P to issue a final scorecard.

"If you're going to remove the rating, they are obliged to do a desktop report... given our relative youth, they decided to do a downgrade."

S&P cited Calliden Group's appetite for business growth and untested record as negative implications for its rating. Mr Vine says the group is still in its formative stage and yet to establish a profitable record.

"The plan is for the business to grow and for the expense position to improve and the old Australian Unity business to be assimilated - and that's an ongoing process."

On the positive side, S&P says CIL has an experienced management team, sound consolidated financials and a very strong solvency level for its assumed risks.

Mr Kirk doesn't believe the lack of a rating for the listed group will have a negative effect on investment.

"Not from our point of view... I don't think it drives any value."

But he is considering seeking a rating in the medium term, once the company has bedded down its three entities into a single insurer.