Foreign general insurance “less affected” by difficulties
Fitch Ratings has downgraded AIG ‘s Issuer Default Rating to 'BBB' from 'A' and cut the UK business’s rating to A+ from AA-.
Fitch said: “The downgrade in the property/casualty subsidiaries' IFS ratings to 'A+' from 'AA-' is based on a perceived decline in their competitive positioning derived from the organisation's financial difficulties, along with the effect this stress is likely to have on AIG's near-to-mid-term operating results.
“While Fitch believes that AIG has taken reasonable steps to protect its competitive positioning and franchise value in light of these difficulties, including the formation AIU Holdings, to serve as part of a re-branding campaign, the agency views the necessity of such measures as symptomatic of the deterioration of the franchise and inconsistent with the 'AA' category ratings.
“The downgrades also reflect AIG's property/casualty subsidiaries' recent operating trends, the results of which Fitch generally views as lagging those of their peers. Fitch believes that AIG's foreign general insurance unit's operating trends have been less affected by the organisation's difficulties.”