Philadelphia Insurance Companies announced Tuesday that Standard & Poor’s upgraded the company’s financial strength to “AA-” from “A+” last week.

S&P’s action, lifting the ratings of the carrier’s admitted Philadelphia Indemnity Insurance Company and non-admitted Tokio Marine Specialty Insurance Company, recognized the companies as “core” subsidiaries of Tokio Marine Group, S&P said in its rating announcement dated April 25.

Previously, S&P saw the companies as “strategically important.” But now, S&P has determined that the products offered by the Philadelphia Insurance Companies “are very closely aligned with and integral to those offered by its parent.”

S&P also revised outlook on the ratings to negative from stable—a move that recognizes that the outlook for Tokio Marine Group’s core operating companies are constrained by S&P’s sovereign ratings for Japan.

The report also cites Philadelphia’s increased integration of operations, enterprise risk management, along with its contributions of “consistent positive earnings and extremely strong capital” to the group.

From 2008 through 2012, the companies averaged a combined ratio of 90.9, and a 15.4 percent return on revenue, S&P’s report says.

In a statement about the upgrade, Bob O’Leary, president and chief executive officer of Philadelphia Insurance Companies, acknowledged S&P’s recognition of the group’s positive financial performance and partnership with the Tokio Marine Group.

“PHLY’s integration with Tokio Marine Group companies in North America will make us more efficient and help us to provide superior service to our customers,” he said.

Sources: Philadelphia Insurance, Standard and Poor’s