Royal & SunAlliance’s NZ life and disability operation has had its insurer financial strength and counterparty credit ratings downgraded by Standard & Poor’s from A+ to A-.

Observers suggest the move by S&P’s is a reaction to moves imposed by the UK parent on its NZ and Australian subsidiaries to abandon the life and wealth creation markets and concentrate on property and casualty. The company’s successful Australian non-general assets have already been put up for sale. There have been plenty of indications of interest, but that’s all, and now the assets may be broken up into more bite-sized packages.

S&P’s said the downgrade follows a reassessment of the status of R&SA Life NZ within the group. The A- rating reflects the stand-alone profile of RSA Life NZ. “It is Standard & Poor’s view that R&SA Life NZ is not strategically important to R&SA and has removed the support R&SA provided to the ratings.”