Promina CEO Mike Wilkins would have to be smiling at the announcement by Standard & Poor’s (S&P) that it intends to raise the insurer financial strength and counterparty credit ratings on the principal general insurance subsidiaries of the group to A.

While the move will be subject to the successful completion of the initial public offering, Mr Wilkins will be pleased with the generally upbeat assessment by S&P analyst Michael Vine. His report praises the group’s “experienced management team” and its ability to instill “a strong underwriting discipline that has resulted in improved operating performance for 2002… especially in some of the Australian intermediated general insurance lines”.

Yesterday Promina revealed it will offer up to 1.057 billion shares at $1.50 to $2 each. Retail investors will pay at least 10 cents less than the institutions.

The retail offer opens on April 14 and closes on May 2. The company will list on May 12.

The current ratings on the Australian and NZ branches of the British Royal & SunAlliance empire are A- with a developing outlook, largely reflecting the financial strength of the parent. Mr Vine said the outlook for the local Promina subsidiaries is expected to be stable.

The strong ratings reflect the “long-established and well-recognised franchise in general insurance, operating in both commercial and personal lines across Australia and NZ through various brands”, Mr Vine said.

“This geographic diversity is also supported by business line diversity across life insurance and funds management operations, although these operations do not command the same market position and influence as their general insurance counterparts, and form a smaller component of the Promina group.”

But the outlook on the life insurance operations remains negative, given a combination of poor investment market returns and flat sales volumes.