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Assessment agencies respond to AIG's life insurance proposal



On Wednesday, Standard & Poor & # 39 ;s Global Ratings Inc. placed American International Group Inc & # 39 ;s real estate / accident operations on "creditwatch" with negative consequences following AIG & # 39 ;s announcement that they would split their life and general insurance units in separate activities. [19659002] The competing credit rating company Moody & # 39 ;s Investor Services Inc. rated the insurer's credit rating negatively, but AM Best Co. Inc. said AIG values ​​remained unchanged.

New York-based S&P said its decision, which could signal a possible future downgrade of A +'s financial strength and BBB + indebtedness to AIG, was due to the potential loss of life and pension business and the income diversification it provides. , uncertainty about future expenses and performance for the real estate / accident business and uncertainty about AIG's capital structure.

The life and pension business, which AIG said would separate from its main real estate / damage business in an as yet indefinite business, accounts for about a third of its revenue. S&P placed the life and pension unit on "creditwatch" with developmental consequences.

"General insurance operating results, although improved, have been lower than average compared to others. As many global insurance companies continue to face COVID-related losses and financial uncertainties, AIG will not be an exception when facing similar headwinds. We expects the company to generate insurance losses and premium declines by 2020 despite the hardening of interest rates, says S&P in a statement.

The rating agency said it will review AIG's credit profile absent life and pension and seek more information from management before making any decisions on

Meanwhile, on Wednesday, Moody & # 39 ;s confirmed A2 & # 39 ;s financial strength for AIG & # 39 ;s general insurance and life and pension units, but said it had added the parent company & # 39 ;s credit rating for a possible downgrade. of the diversified revenue from its two core units, says New York-based Moody & # 39; s in a statement countries.

Oldwick, New Jersey-based Best said in a statement late Tuesday that its AIG financial strength for AIG and its entities will remain unchanged after Monday's announcement and it is awaiting more details on the proposed separation.

While AIG has benefited from the diversification of its operations, various measures in recent years, including changes in insurance strategy and the purchase of additional reinsurance, have "improved the operational profile of AIG PC," said Best.

Equity analysts also noted the improvements that have been made in AIG's real estate / accident operations since the resigning CEO Brian Duperreault returned to the company in 201

7. Mr. Duperreault will be succeeded by Peter Zaffino, AIG's President, in March 2021. [19659002] More insurance and risk management news about the coronavirus crisis here .

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