S&P revises Zurich Insurance to stable

Standard & Poor's said it revised the outlook on Zurich Insurance Co. Ltd. to stable from positive and affirmed the AA- insurer financial strength and counterparty credit ratings.

The agency also revised the outlook on the group’s Australian subsidiary, Zurich Australian Insurance Co., to stable from positive. Zurich Australian Insurance is a strategically important entity of the Zurich group.

The rating on Zurich Australian Insurance remains unchanged at A+.

S&P said the outlook revision follows Zurich's Aug. 25 announcement that it made a proposal to RSA Insurance Group plc regarding a conditional nonbinding offer to acquire RSA's entire issued ordinary share capital for about $9 billion in cash. RSA's board has expressed its willingness to recommend Zurich's offer at the indicated price level to RSA's shareholders, subject to the satisfactory resolution of other terms of the possible transaction.

Although Zurich has not made a binding offer, S&P said statements from both Zurich and RSA lead it to assume that there is an increased likelihood of this happening.

According to the Panel on Takeovers and Mergers, Zurich has until Sept. 22 to make a formal offer.

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