AIG’S TAIWANESE UNIT DOWNGRADED BY MOODY’S

DESPITE the expectation that it will remain part of the American International Group ( AIG), AIG General Insurance (Taiwan) Co has seen its insurance financial strength rating downgraded by Moody’s Investors Service. The rating dropped to A3 from A1 in a move that Moody’s said reflected the downgrade of the AIG parent. Moody’s analyst Sally Yim explained: "The rating action reflects that given the capital and liquidity strains at AIG, the level of support to AIGGI Taiwan has weakened and hence the previous two-notch uplift to the stand-alone rating was no longer warranted. Hence, the A3 insurance financial strength rating now represents the stand-alone financial strength of AIGGI Taiwan." She added the rating remained on review for possible further downgrade. She acknowledged actions put in place last month to improve the insurer’s profitability including cutting staff and branch numbers, but she said: “AIGGI Taiwan's 1H2008 profitability remains weak and below Moody's expectations. It reported a net loss of