Fitch ratings have announced that Insurance Australia Group’s (IAG) insurer financial strength rating will be unaffected by today’s announcement to buy AMI Insurance Ltd. for NZ380 million dollars. The companies rating remains at AA- with a positive outlook.
In the statement from the ratings company, they said the deal will strengthen IAG’s competitive position in New Zealand.
“The acquisition is in line with IAG’s long-term strategy to grow profitably in its domestic markets and it is expected to generate supportive earnings,” the company said in a statement.
“We acknowledge that IAG will not assume AMI’s existing liabilities resulting from the Canterbury earthquakes, but will benefit from AMI’s existing reinsurance cover for future catastrophe events”
IAG made the announcement to buy AMI this morning. AMI had been struggling in recent months and needed to be bailed out by the New Zealand government after the earthquakes in February provoked nearly NZ2 billion dollars in claims.
