Moody’s has upgraded its credit ratings for Suncorp Metway. It has raised the Brisbane-based insurer’s long-term rating from A2 to A3 and its short-term rating from Prime-1 to Prime-2.

This is the second time in two years that Moody’s has given Suncorp Metway a financial services upgrade. Standard & Poor’s also has the company in review for a possible upgrade.

Last year Suncorp Metway purchased GIO from AMP and became Australia’s second-biggest general insurer. Moody’s said the $1.3 million paid out for GIO might have been a high price. But turning to the future, Moody’s said “the challenge now is to derive the anticipated diversification benefits and synergies”.

“The bank has demonstrated above-average cross selling capabilities in the past, and this should bode well for its ability to extract available synergies,” Moody’s said.