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Fitch affirms ratings on AIG, subsidiaries

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Fitch affirms ratings on AIG, subsidiaries

Fitch Ratings has affirmed the long-term issuer default rating of American International Group Inc., AIG International Inc. and AIG Life Holdings Inc. at A-.

The outlook is negative for AIG and AIG International, but Fitch revised the outlook for AIG Life to stable from negative.

The agency also affirmed the A (Strong) insurer financial strength rating of the property and casualty insurance subsidiaries with a negative outlook.

The subsidiaries included in the action are AIU Insurance Co., American Home Assurance Co., AIG Assurance Co., AIG Europe Ltd., AIG Property Casualty Co., AIG Specialty Insurance Co., Commerce and Industry Insurance Co., Granite State Insurance Co., Illinois National Insurance Co., Insurance Co. of the State of Pennsylvania, Lexington Insurance Co., National Union Fire Insurance Co. of Pittsburgh, Pa. and New Hampshire Insurance Co.

Additionally, Fitch affirmed the A+ (Strong) insurer financial strength rating of life insurance subsidiaries AGC Life Insurance Co., American General Life Insurance Co., Variable Annuity Life Insurance Co. and United States Life Insurance Co. in the City of New York. The outlook was revised to stable from negative.

The agency also affirmed the issuer default rating of Validus Holdings Ltd. at A- and the insurer financial strength rating of Validus Reinsurance Ltd. at A. The outlook for the issuer default rating is negative, while the outlook for the insurer financial strength rating is stable.

Fitch said the life insurance subsidiaries continue to enjoy favorable financial results and strong capitalization, which it expects to continue — thus leading to the outlook revision.

The negative outlooks were due to weak underwriting results from 2015 to 2017, which were brought on by adverse reserve development and large 2017 catastrophe losses, leading to lower overall profits and parent company interest coverage below rating guidelines.