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S&P affirms AIG Insurance New Zealand

S&P Global Ratings affirmed its A ratings on AIG Insurance New Zealand Ltd., with a stable outlook.

The rating agency affirmed AIG Insurance New Zealand's stand-alone credit profile at "bbb+," which reflects its adequate market position and reasonably strong capital adequacy. The strengths are tempered by the company's small equity base, which leaves it vulnerable to adverse shocks.

S&P said it expects AIG Insurance New Zealand to receive credit support from its ultimate parent, American International Group Inc., as a strategic entity.

A downgrade is expected if earnings fall significantly below S&P's expectations, or if capital adequacy falls below the very strong rating level. The rating may also be downgraded if the rating agency finds the insurer to have become a nonstrategic unit of its parent.

A higher financial strength rating on the company is unlikely in the medium term. S&P could consider upgrading the ratings if the insurer becomes a significant and integral part of the group's strategy. An upgrade or downgrade of the parent will have a similar effect on AIG Insurance New Zealand.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.