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AIG property-casualty units upgraded by S&P

American International Group Inc (AIG) had the ratings of its property-casualty units upgraded after chief executive officer Robert Benmosche sold assets to repay a US bailout and simplify the company.

Standard & Poor’s upgraded AIG’s P&C business financial strength rating one notch to “A-plus” and affirmed the “A-plus” rating on the its life business citing the successful restructuring of the company over the past two years.

“Management is now focused on improving the operating results and credit profile of the ongoing operations,” the ratings firm said in a statement on the New York-based insurer. “The company has been making significant investments in staff, systems, and underwriting tools to improve the profitability of its property-casualty operations.”

The outlook for both groups is stable.

S&P says the upgrade reflects the sale of AIG’s non-core businesses and the $182.3 billion repayment to the federal government for the bailout the insurance giant received in 2008. The ratings service went on to say that it believes the carrier is “committed to maintaining and enhancing AIG’s competitive position in the global P&C and US life businesses.”

The company further underscores its commitment, according to S&P, by phasing out the Chartis brand and rebranding as AIG.

AIG has been streamlining both the life and P&C operations to reduce administrative and regulatory compliance costs and improve capital management, says the ratings agency. At the same time, it is improving profitability to its P&C operations by investing in staff, systems and underwriting tools bring operations “to a level more consistent with its historical underwriting results.”

S&P says it expects AIG Life to maintain its competitive position while P&C business will improve its results to a level “more consistent with its peers,” while revenues are expected to remain strong throughout entire company.

The American International Building (Photo by Mark Tatem)

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Published May 13, 2013 at 9:00 am (Updated May 12, 2013 at 1:16 pm)

AIG property-casualty units upgraded by S&P

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