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Moody's revises Standard Life Assurance outlook, affirms Standard Life Aberdeen

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Moody's revises Standard Life Assurance outlook, affirms Standard Life Aberdeen

Moody's on March 1 revised the outlook on Standard Life Assurance Ltd. to negative from stable and affirmed the A1 insurance financial strength rating, after parent Standard Life Aberdeen Plc said it will sell Standard Life Assurance to Phoenix Group Holdings for some £3.24 billion.

The rating agency also affirmed Standard Life Aberdeen's long term issuer rating at A3 and revised the outlook to stable (m) from stable.

The negative outlook on Standard Life Assurance reflects Moody's view that the company's credit profile will weaken after the sale, following which Standard Life Aberdeen will retain its U.K. retail platforms and financial advice business. Without those businesses, Moody's projects that Standard Life Assurance's profitability will fall in light of the natural reduction in its annuity book and competition in the corporate pension business.

Standard Life Assurance's large asset volume also implies a degree of execution risk for Phoenix, Moody's added.

Standard Life Aberdeen's rating affirmation indicates the company's strong market position in the asset management industry, solid profitability and moderate leverage.