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Sarah Veysey

S&P downgrades RSA Insurance financial strength rating to A-

December 17, 2013 - 8:59am

RSA Insurance Financial Strength Rating

Standard & Poor's Corp. has lowered its financial strength rating on RSA Insurance Group P.L.C. and its core operating subsidiaries to A- from A.

S&P on Monday said in a statement that it has taken the rating action because of concerns about weaknesses in the company's management, among other factors.

S&P said it had lowered its rating of RSA after “a succession of profit warnings, culminating in the resignation of the CEO and a strategic review, indicate some weaknesses in management and governance generally.”

RSA's CEO, Simon Lees, resigned last week. A replacement is being sought.

S&P said that Mr. Lees' resignation after further reserve strengthening at the company's Irish unit following the discovery of claims and accounting irregularities and a series of profit warnings, raised questions about the company's ability to execute plans to strengthen capital and earnings.

In a separate statement issued Monday, RSA Chief Financial Officer Richard Houghton said the company noted S&P's decision and would work closely with the rating agency as RSA undertakes a review of its business.

He said RSA believed the rating action “will have no material impact on the group's operations, our customers or our ability to trade.”