Standard & Poor's Ratings Services today said that it raised the insurer financial strength and counterparty credit ratings on the Promina Group Ltd's general insurance businesses, Vero Insurance Ltd. and Vero Insurance (New Zealand) Ltd. (including its rated subsidiaries of AA Insurance Ltd,. Vero Accident Insurance Ltd., and Vero Liability Insurance Ltd.) to 'A+' from 'A'.

At the same time, the long-term counterparty credit rating on Promina Group Ltd. (group holding company) was raised to 'A' from 'A-' and remains one notch lower than the ratings on the group's operating companies. The outlook on all ratings is stable. The group's reset preference share hybrid rating was raised to 'BBB' from 'BBB-' while the rating on Vero Lenders Mortgage Insurance Ltd., in run-off, remains unchanged at 'A-'.

"The ratings upgrade reflects the group's continued earnings growth and its strong underlying financial and capital strength," said Standard & Poor's credit analyst Paul Clarkson, Financial Services Ratings. The long-term ratings had been on a positive outlook since March 29, 2004. For the half-year ended June 30, 2004, Promina reported a net profit of A$204 million, which demonstrates continued earnings momentum on the A$135 million reported for the first-half in 2003 and represents a solid 17.5 percent return on equity. "Promina has consistently performed stronger than forecast during its short trading period since its initial public offering (IPO) in May 2003," said Mr. Clarkson. "Concerns about Promina group's separation from its long-term supportive parent in May 2003, Royal & SunAlliance Insurance Group PLC, were ameliorated by stability in senior management, maintenance of strong business fundamentals, and solid operating performances in the past 15 months."