S&P Global Ratings has lowered from AA- to A+ the long-term ratings on six insurance entities belonging to three major Australian banks.

The entities affected are the Colonial Mutual Life Assurance Society, the Colonial Mutual Life Assurance Society (New Zealand branch), OnePath Life, OnePath Life (New Zealand)

Westpac Life Insurance Services and Westpac Life New Zealand.

Long-term ratings on the intermediate holding companies Colonial Holding Co and ANZ Wealth Australia have also been lowered, from A+ to A, with respective short-term ratings on the companies affirmed at A-1.

The revised assessments take into account the sale of insurance businesses by some Australian banks in the past year, prudential regulation and pressures on capital allocation.

“The downgrades reflect our view that the strategic link of the affected insurance companies and their intermediate holding companies to the parent groups is weaker than what we previously considered,” S&P said.

“We previously assessed these companies as being core subsidiaries of their parent banking groups, which comprise ANZ Banking Group, Commonwealth Bank of Australia and Westpac Banking Corp.

“In particular – contrary to our previously held view – we now consider these entities may be severed from the parent banking groups and operated as, or sold on as, ongoing businesses.

“Consequently, we no longer consider that financial support from the parent groups, if needed, will be absolute and timely under all foreseeable situations.”