S&P affirms AAA ratings on AIG and various operating firms

Our Banking Bureau
25 March 2003

New York: Standard & Poor’s (S&P) ratings services have affirmed its AAA ratings on American International Group (AIG) and various AIG operating companies.

The rating agency also raised its financial strength ratings on several life insurance companies ultimately owned by AIG to AAA from AA+ based on explicit support from American Home Assurance Company in the form of a guarantee for all existing and prospective policyholder obligations.

S&P also withdrew its AA+ counter-party credit ratings on these companies. In addition, it raised its ratings on several other AIG entities to AAA because of their assignment of core status with the AIG group of life companies. According to S&P the outlook on all these companies is stable.

“The ratings are based on AIG’s well-diversified business position, track record of excellent operating performance (notwithstanding the unprecedented World Trade Center losses and restructuring charges in 2001 followed by the non-life reserve charge in 2002), and very strong levels of capital adequacy,” notes S&P credit analyst Grace Osborne.

AIG's business mix is expected to be more heavily skewed towards domestic life product lines. In addition, its business in the property and casualty sector is expected to remain robust, especially in light of improved market conditions.

AIG is a well-diversified provider of global property and casualty, and life insurance that is uniquely positioned to make the most of market conditions. The acquisition of American General Corporation in late 2001 increased the underlying life premium source to generate 2002 premiums of $20 billion.