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FOR IMMEDIATE RELEASE
LONDON - DECEMBER 03, 2018 04:05 PM (EST)
A.M. Best has assigned a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of “a” to American International Group UK Limited (AIG UK) (UK). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect AIG UK’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in AIG UK’s strategic importance and integration within the American International Group, Inc. (AIG or the group).
AIG UK was established as part of AIG’s response to Brexit, alongside affiliated company AIG Europe S.A, enabling the group to continue servicing policyholders across the European Economic Area (EEA) and the U.K., regardless of the terms of the U.K.’s exit from the European Union. AIG UK received regulatory approval in February 2018 and the existing U.K. portfolio transferred from AIG Europe Limited (AEL), the group’s incumbent risk carrier for the U.K. and Europe, to AIG UK following a Part VII transfer, effective 1 December 2018.
A.M. Best views AIG UK as strategically important to AIG, enabling continued access to the U.K. market, the group’s third largest territory for property & casualty (P&C) after North America and Japan. AIG UK’s balance sheet strength is assessed as very strong, reflecting expected strongest risk-adjusted capitalisation per the company’s business plan, alongside strong internal capital management capabilities. An offsetting factor to the balance sheet assessment is AIG UK’s expected moderate dependence on contingent capital, in the form of letters of credit, which form part of the company’s approved capital structure.
The portfolio assumed by AIG UK has experienced some adverse performance in recent years. A.M. Best expects prospective performance to demonstrate less volatility and stronger metrics following management actions taken over recent years to strengthen underwriting and reserving practices through reductions in net risk exposures, more stringent risk selection, improved data quality and an increased focus on profitable lines of business.
AIG UK benefits from the profile of AIG in the U.K. and in the London market, operating previously through AEL, where the group has an established market position, notably in core segments of commercial and specialty P&C. The business profile assessment also reflects the highly competitive market conditions of the segments in which the company will operate.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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