Standard & Poor’s has also placed its A long-term counterparty credit and insurer financial strength ratings on the various operating entities of Royal & SunAlliance on CreditWatch with negative implications.

The CreditWatch placement reflects S&P’s increased surveillance of the British-based group’s progress toward improving capital adequacy and meeting earnings expectations.

In August S&P’s said it expected the group to strengthen its capital adequacy and deliver an improvement in earnings during the second half of 2002. “These expectations are key requirements for maintaining the ratings at their current level,” credit analyst Mark Button said.

“A CreditWatch placement with negative implications does not imply a downgrade,” Mr Button said. “R&SA will be announcing the results of its capital review within the next three weeks, together with an update on third-quarter results. S&P’s expects to update the CreditWatch placement following these announcements.”