AM Best Comments on Credit Ratings of American International Group, Inc. Following Fortitude Group Holdings, LLC Sale Announc...
November 26 2019 - 05:09PM
Business Wire
AM Best has commented that the Long-Term Issuer Credit
Rating (Long-Term ICR) of “bbb” of American International Group,
Inc. (AIG) (headquartered in New York, NY) [NYSE: AIG], as well as
the Financial Strength Ratings and the Long-Term ICRs of its
operating subsidiaries are unchanged following AIG’s recent
announcement that it plans to sell a majority stake in Fortitude
Group Holdings, LLC (Fortitude RE). The outlook of these Credit
Ratings (ratings) remains stable.
AIG formally announced the majority sale of its legacy run-off
specialist company, Fortitude RE, for $1.8 billion to Carlyle
Group, and T&D United Capital Co. Ltd. AIG’s ownership was
80.1% after previously selling 19.9% to the Carlyle Group in
November of 2018, and it is selling an additional 51.6% to the
Carlyle Group and 25% to T&D United Capital Co. Ltd. The
balance of 3.5% ownership will remain with AIG as a minority stake.
AIG expects to use the majority of the proceeds to contribute
capital to its insurance company subsidiaries upon closing, which
is expected to take place in mid-2020.
AM Best believes this transaction is incrementally positive for
the AIG-rated companies. Fortitude RE held roughly $31 billion and
legacy life and retirement reserves, and an additional $4 billion
in general insurance/property/casualty reserves. The reserve blocks
overall were largely non-core legacy products that tended to be
longer-duration higher risk products based on AM Best’s product
continuum. AM Best believes the removal of these legacy reserves
will improve the holding company’s risk-adjusted capital
incrementally and leave it with a more focused reserve profile
while still maintaining significant diversification between its
existing companies.
This press release relates to Credit Ratings that have been
published on AM 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 AM 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 AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data provider specializing in the insurance industry. The company
does business in more than 100 countries. Headquartered in Oldwick,
NJ, AM Best has offices in cities around the world, including
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For
more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20191126005873/en/
Gregory Dickerson Senior Financial Analyst—P/C
+1 908 439 2200, ext. 5161
gregory.dickerson@ambest.com
Christopher Sharkey Manager, Public
Relations +1 908 439 2200, ext.
5159 christopher.sharkey@ambest.com
Erik Miller Associate Director—L/H +1 908 439
2200, ext. 5187 erik.miller@ambest.com
Jim Peavy Director, Public
Relations +1 908 439 2200, ext.
5644 james.peavy@ambest.com
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