S&P Global Ratings downgraded the outlooks on AIU Insurance Co. Ltd. and Fuji Fire & Marine Insurance Co. Ltd., the Japan-based subsidiaries of American International Group Inc., to negative from stable.
Concurrently, the rating agency affirmed the A+ financial strength and long-term counterparty credit ratings on both the companies. The ratings action came after S&P revised outlooks and affirmed ratings on AIG's core companies June 6.
The affirmation on the two companies reflects the ratings of AIG's other core companies, as well as S&P's continued assessment of both insurers' core status to the group. S&P noted that ratings on the Japanese insurers are constrained by Japan's sovereign rating.
S&P could raise the outlooks to stable over the next 24 months if the outlooks of AIG's core companies are revised to stable.
Conversely, the rating agency could consider downgrading the Japan-based entities if a weakening of AIG's credit profile leads to a downgrade of its core companies. A downgrade of Japan's sovereign rating could also result in a similar action on the two insurers.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.