2008 0528 - A.M. Best - A.M. Best Removes Ratings of AIG's Property/Casualty and Life Subsidiaries From Under Review; Affirms, Assigns Negative Outlook - [link]
Best added that the holding company downgrade reflects its “viewpoint of the detrimental implications of AIG’s risk management and aggressive risk appetite relating to investment concentrations within the securities lending portfolio and matched investment programs tied to mortgage related securities.”
The article added that AIG’s “risk appetite” had been larger than Best’s expectations, “regardless of AIG’s market surveillance resources within the mortgage industry.”
Best also noted that its concerns “included potential liquidity issues within the securities lending program, lack of proactive management or containment of exposure to the mortgage and real estate industry on both the liability and asset sides of AIG’s balance sheet, and over reliance on the amount of support provided by the company’s strong balance sheet.