AM Best Comments on Credit Ratings of American International Group, Inc. and Its Subsidiaries Following Announced Plans to Separate Its Life & Retirement Business
AM Best has reaffirmed the Long-Term Issuer Credit Rating (ICR) of 'bbb' for American International Group, Inc. (AIG), with no changes following its announced separation of its life and retirement business. AIG's Financial Strength Ratings (FSR) for both property/casualty subsidiaries and Life & Retirement Group remain at 'A' (Excellent) with stable outlooks. This strategic move aims to streamline operations and enhance shareholder value, as AIG has successfully improved its operational profile through various risk management strategies.
- AIG's Long-Term ICR remains at 'bbb' and FSR at 'A' (Excellent); stable outlooks for all ratings.
- Separation of life and retirement business aims to enhance shareholder value through simplified corporate structure.
- Improvement in AIG PC's operational profile due to underwriting changes and risk management measures.
- Uncertainty regarding the impact of the business separation on capital structure and credit quality.
- Awaiting additional details on the planned timeline for the separation process.
OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of American International Group, Inc. (AIG) (headquartered in New York, NY) [NYSE: AIG] remains unchanged following its announcement to pursue a separation of its life and retirement business. AM Best also has commented that the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a” of AIG’s property/casualty insurance subsidiaries (collectively referred to as AIG PC) remain unchanged. Concurrently, AM Best has commented that the FSR of A (Excellent) and the Long-Term ICR of “a” for the members of the AIG Life & Retirement Group (AIG L&R) also remain unchanged. The outlook of these Credit Ratings (ratings) is stable.
On Oct. 26, 2020, AIG announced its intention to separate its Life and Retirement business segments from AIG. AIG’s board of directors believes a more simplified corporate structure and focused management will lead to increased shareholder value.
Historically, the consolidated group has benefited from the operational profitability and diversification brought by AIG L&R. However, AM Best notes the significant changes in underwriting, volatility reduction actions taken through reinsurance purchases and product portfolio repositioning that have been implemented at AIG PC over the last few years, all of which have improved AIG PC’s operational profile. At this point, AM Best awaits additional necessary details on how this separation will proceed, the impact it will have on the overall capital structure and credit quality at AIG and each segment, along with a planned timeline. AM Best will continue to monitor the situation and react accordingly from a ratings perspective as details arise.
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