NRMA Weathers Management Storm – SP Affirms AA+ Rating

NRMA, Australia’s largest insurer, has apparently weathered the management shakeup which began last April and saw the departure of its chairman Nick Whitlam and its managing director Eric Dodd.

Standard & Poor’s, the international rating service, announced that it was affirming the company’s double ‘A’ plus ratings and was removing all the group’s companies “from Credit watch with negative implications where they were placed April 24, 2001, following recent instability in management hierarchy.”

Interim CEO Ian Brown has made some chnages within the company, announcing the closure of 21 branch offices, the sale of its mortgage lending unit, and a restructuring of its road services. NRMA shares hit a new high of A$3.25 ($1.70) last Friday.

S&P said the ratings “continue to reflect NRMA’s excellent business position, with clear market leadership in general insurance in Australia, its associated benefits of economies of scale and expense advantage, along with extremely strong capital position and soundly and conservatively based claims reserves.”

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