Standard & Poor’s Ratings Services today raised its long-term counterparty credit and financial strength ratings for Aviva Insurance Co. of Canada, Elite Insurance Co., Pilot Insurance Co., Scottish & York Insurance Co. Ltd., and Traders General Insurance Co. (collectively known as Aviva Canada). to A+, from A. The outlook is stable.

The companies are the primary operating subsidiaries of Toronto, Ont.-based insurance holding company Aviva Canada Inc. S&P considers Aviva Canada to be strategically important to its parent company, Aviva plc. Aviva plc is the number one insurer in the U.K. and the fifth-largest in the world.

Accordingly, S&P says Aviva Canada’s ratings benefit from the implied support of its parent. On a standalone basis, the ratings on the individual subsidiaries would be lower.

S&P says the ratings on Aviva Canada reflect the favorable change in the company’s operating performance in 2003 and during the first half of 2004, following the introduction of government auto reforms, rate increases, capital gains generated within the companies’ investment portfolio, and the internal stop loss arrangement that was provided by Aviva plc. Aviva plc has recently implemented improved operational management infrastructure and oversight, and this should allow the Canadian operations to further leverage off the strength of its parent.

S&P adds that the challenges facing Aviva Canada include: the cyclical nature of this sector’s operating performance; a very competitive business environment; the commodity-like nature of the company’s products; and the consolidation that continues to occur in the insurance and financial services industry.

According to S&P , Aviva Canada is the second-largest insurer in the Canadian property and casualty market with its 9% market share position. S&P notes that the companies have iwell-established distribution channels and diversified product lines.

As of June 2004, Aviva Canada had general assets of $6.7 billion, and a total shareholder equity base of slightly more than $1.2 billion. Aviva Canada contributes 14% of worldwide general insurance premiums and about 4% of the group’s total gross premiums.

The stable outlook reflects S&P’s expectation that Aviva Canada’s operating performance will remain strong despite the cycle nature of the Canadian general insurance industry, and each of the individual operating companies will maintain a strong capital adequacy ratio on an ongoing basis.