A.M. Best Co. has revised the outlook to stable from negative and
affirmed the financial strength rating of A (Excellent) and issuer
credit ratings (ICR) of "a" of the domestic life/health subsidiaries of American
International Group, Inc. (AIG) (New York, NY) [NYSE: AIG]. AIG's
domestic life/health companies are collectively referred to as SunAmerica
Financial Group (SAFG). (See below for a detailed listing of the
companies and ratings.)
The revised outlook reflects SAFG's improved surrender rates, strong
positive cash flows and the progress made to restore its leading market
positions following a significant decline in 2009 due to issues
surrounding its ultimate parent, AIG. Over the last 18-24 months, SAFG
has been reinstated by all key distribution networks and has expanded
marketing through the establishment of new relationships. The group has
maintained its long-standing top ranking in bank fixed annuity sales and
number three ranking for 403(b) retirement assets under management. In
addition, SAFG continues to make progress towards leading positions in
other product lines with a top-10 ranking in variable annuity
non-captive sales (up from a low point of number 18) and a number five
ranking in sales of term life insurance (up from number 12). Moreover,
after experiencing elevated surrender rates over the last few years,
policy surrenders have stabilized in 2011 and are currently near
historical norms. Consequently, net flows have been positive for three
consecutive quarters totaling $2.1 billion through September 30, 2011.
The ratings of SAFG recognize its excellent risk-adjusted
capitalization, diverse business and earnings profile and robust
multi-channel distribution platform. The life/health companies' solid,
consistent statutory earnings over the last few years have facilitated
growth in capital, comparing favorably to its peers. SAFG maintains a
diverse business profile with established franchises in individual fixed
and variable annuities, life insurance, group retirement plans and
mutual funds. The group's market positions are supported by a large and
diversified distribution system that is made up of financial
institutions, national, regional and independent broker dealers, career
financial advisors, independent marketing organizations, insurance
agents and a direct-to-consumer platform.