BEST CUTS RATINGS ON AIG AND SUBSIDIARIES

US ratings concern AM Best has lowered the financial-strength ratings of AIG and its wholly owned subsidiaries to single A plus from single A double-plus following the group’s recent disclosure of additional instances of improper accounting that will cut its net worth by $2.7bn. Best also cut the debt ratings of AIG operating companies, and said further downgrades could be possible. Best is also considering downgrades of the financial strength ratings of AIG’s majority-owned California-based motor insurance affiliate 21st Century Insurance Group. In a related move, Best is also looking at a possible downgrade of the single A plus financial strength rating and double a minus debt rating of Lloyd’s syndicate 1414, which is managed by Ascot Underwriting. The action follows Best’s downgrade in the ratings of AIG’s American Home Assurance unit, which provides the syndicate with an unconditional guarantee of payments on policyholder liabilities.