SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” and has maintained the under review with negative implications status for AIG Australia Limited (AIG Australia) (Australia). The ultimate parent company is American International Group, Inc. (AIG) [NYSE: AIG]. The ratings of all AIG’s subsidiaries remain under review with negative implications over concerns of the strengthening of loss reserves in AIG’s non-life business by $3.6 billion during the fourth quarter of 2015. Concurrently, A.M. Best has withdrawn AIG Australia’s ratings in response to the company’s request to no longer participate in A.M. Best’s interactive rating process.
AIG Australia's ratings mainly reflect its strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and very good operating performance. The ratings also consider the various support provided by AIG, which includes reinsurance and risk management. A key offsetting factor is the company’s high dividend payout ratio. As a result of the dividends paid in FY2012 through FY2014, AIG Australia’s risk-based capitalization ratios and liquidity ratios have come down over the past few years.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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