ANZ sold OnePath to Cigna Life this month and at the same time Cigna’s parent company is proposing to acquire pharmacy benefit manager Express Scripts (ESI).

The agency says that after regulatory approvals are granted for the Cigna ESI merger, it may downgrade Cigna's insurance operating companies to 'A' from 'AA-', and subsequently OnePath from ‘A+' to 'A'.

S&P says Cigna is likely to provide support to OnePath given that its services are complementary to Cigna's existing capabilities and international strategy, and further strengthens Cigna’s existing operations in New Zealand.

The ratings on OnePath reflect the insurer's strong competitive position and strong capital and earnings position, which we view as ongoing under Cigna ownership. The ratings include a one-notch uplift above its 'a' stand-alone credit profile due to expected group support if required.

The CreditWatch negative placement of the ratings on OnePath reflects the status on its new parent, Cigna.

“We expect to resolve the CreditWatch within the next three months once the transaction between Cigna and ESI receives regulatory approval and is closer to completion. After regulatory approvals are granted, we may downgrade Cigna's insurance operating companies to 'A' from 'AA-', and subsequently OnePath to 'A' from 'A+', which would equate with its stand-alone credit profile.”