Moody's on Sept. 27 upgraded the insurance financialstrength rating of BUPA InsuranceLtd. to A1 from A2. At the same time, the agencyupgraded all debt ratings on securities issued by Bupa Finance Plc.

The outlook has been changed to stable from positive.

The ratings upgrade reflects the agency's view of 's geographically diverseportfolio and excellent market position in private medical insurance. It also takesinto account relatively low risk profile of private medical insurance and"very good" capitalization along with a strong track record ingenerating capital through retained earnings. Moody's noted that thesestrengths are somewhat offset by Bupa's active inorganic growth strategy, whichresults in an elevated amount of goodwill on the balance sheet and somewhathigh financial leverage.

The high level of goodwill increases the risk of materialimpairment losses.

The outlook reflects the agency's expectation that,notwithstanding difficult market conditions in a number of the group's coresegments, Bupa will continue to grow profitably while maintaining strongcapital levels.