Standard & Poor’s Ratings Services has affirmed its ‘AA-‘ counterparty credit and financial strength ratings on Royal Bank of Canada Insurance Co. Ltd.

“The ratings are based on RBCICL’s status as a core member of the Royal Bank of Canada group as well as on the maturation of its business plan, its very strong capital adequacy, and its very strong operating profitability throughout the rating history,” said S&P’s credit analyst Rodney Clark. The fundamental strength of the rating is tied to the incoming European life book, it says, noting that the outlook on RBCICL is stable.

The rating agency says that it expects strong and consistent earnings from each of RBCICL’s core operations. RBCICL’s average return is expected to continue to exceed 30% for fiscal 2004, with somewhat reduced volatility because of increased focus on risk management and retention levels. Management is expected to maintain capital adequacy within the ‘AA’ range, a level sufficient to withstand the controlled amounts of risk that the company accepts, it says.