S&P cuts Legal & General

Standard & Poor's said it lowered the long-term counterparty credit ratings on Legal & General Assurance Society Ltd. to AA from AA+ and its long- and short-term counterparty credit ratings on Legal & General Group plc to A+/A-1 from AA-/A-1+.

The outlook is negative.

"We believe the current financial market and economic conditions have adversely affected L&G's capitalization. Capitalization, while remaining very strong, has in our opinion weakened significantly in 2008," S&P analyst Charis Adu-Kwapong said in a statement.

The action also reflects the agency's view that the company's risk profile has increased, S&P said.

Ratings reflect the company's very strong competitive position in the U.K. life and pensions market, robust underlying operating performance and very strong capitalization, the agency said.

These strengths are partly offset, however, by a relative increase in the group's risk profile and the challenging operating environment for U.K. life insurers, the agency noted.

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