Fitch Ratings downgrades AIG to 'A'

[ozymandius]

Source: Marketwatch

Fitch Ratings said late Monday that it downgraded American International Group because the insurer's ability to raise capital for its holding company has become "extremely limited." Fitch cut the issuer default rating and outstanding debt ratings of AIG to A from AA-.

..skeletal story...

Read more: http://www.marketwatch.com/news/story/fitch-ratings-downgrades-aig-a/story.aspx?guid={EE117033-1567-4C75-A764-C9EA6A2745FF}

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The largest insurer is on its knees.

[Pale Blue Dot]

1. I'm not sure that the average person understands that "A" is actually quite bad.

So for those who don't know: "A" is actually quite bad.

[phantom power]

2. Grade inflation... it's everywhere!

[Zynx]

4. It's not terrible in all circumstances. However, you don't want a company like AIG at only an A.

[slackmaster]

5. It's definitely bad for a top-tier insurance company

Thanks for pointing that out.

[NeoConsSuck]

17. Top-Tier is an understatement

They are *by far* the largest insurance company in the world.

If they fail, it is definitely game.set.match

[slackmaster]

18. They are also one of my employer's biggest customers

So is Countrywide, and Bank of America, as was IndyMac Bank, and several title companies that have shrunk or gone under...

:scared:

[ozymandius]

6. And worse.

The big deal about AIG: they are starved for capital to the point at which they are short funds for day-to-day operations. New York state has just allowed the parent company to borrow $20 billion from its subsidiaries. Now captains of capital are searching for a bank (or banks) big and healthy enough to lend AIG the rest of the capital it needs to shore up its capital requirements.

It's bleak.

[Mojambo]

3. Man oh man. What a Monday. n/t

[DrDan]

7. a kiss of death

[lurky]

8. Isn't this what they were

desperately trying to avoid? This is what kills AIG, right?

[slipslidingaway]

9. K&R n/t

[roamer65]

10. If AIG goes under, it will be a financial nuclear bomb.

[sop]

12. AIG is a major reinsurer

AIG provides reinsurance to many other insurance companies. For those not familiar with the term "reinsurance", it's a system that allows insurers to lay off the risk to other companies and remain in business in the event of catastrophic losses. If a major reinsurer goes down, it will seriously affect many others in the insurance business.

[RedEarth]

11. AIG Rating Cut to A- by S&P; Remains on Watch Negative

By Steve McPherson

Sept. 16 (Bloomberg) -- American International Group Inc.'s long-term counterparty rating was cut to A- from AA- by Standard & Poor's.

The U.S. rating company in a report cited a ``combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses.''

S&P also lowered AIG's short-term counterparty credit rating to A-2 from A-1+, and cut its counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries to A+ from AA+. The ratings remain on watch for a possible further downgrade, S&P said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHdlGMn29NOs&refer=home

[slipslidingaway]

13. CNBC just now - Moody's downgrade as well n/t

[Pale Blue Dot]

14. Someone in GDP said CNBC reporting that AIG will file for bankruptcy on Wednesday.

If I find a link I will post it.

[slipslidingaway]

20. Unless they can get additional capital tomorrow that is what

I heard as well.

[Zynx]

21. Good luck plugging $75 billion into that thing.

[slipslidingaway]

23. Agree, what a mess :( n/t

[NeoConsSuck]

15. CNBC is right now saying

this is bigger than the Lehman bankruptcy. Tomorrow will be just as bloody as today.

[amandabeech]

25. OOH!

Might there be total capitulation this week?

Or will it take more time?

I wonder if Gustav and Ike claims have caused any of this problem. They are major disasters, and the reinsurance industry must be involved.

[yodermon]

16. I have auto insurance with them. Is there anything i should do?

[slackmaster]

19. I wouldn't worry about it

I think it is unlikely that AIG's auto insurance division is going to be affected.

How are their rates?

[customerserviceguy]

24. As I recall, in British Columbia, Canada

they have all auto insurance running through a provincial department. Wouldn't it be great if we just had no-fault, without irrelevant shit like peoples' credit scores affecting what they paid? Insurance is such a racket, no other business could get away with charging different rates based on sex, marital status, or other silly BS.

[slackmaster]

26. We have no-fault in California

Your premiums are based on your driving history, age, gender, and where you live (ZIP code).

...no other business could get away with charging different rates based on sex, marital status, or other silly BS.

Male drivers crash more often than female drivers. That is a proven fact. Young men are the worst of all. I don't believe it's unreasonable to charge more for being male or young.

[customerserviceguy]

27. If we could prove

differentials between people of various races, religions, or occupations in their accident/ticket rates, and charged them accordingly, would that seem equally as fair to you?

Why not handle the youth situation with "years of experience of ticket and accident free driving", rather than simple age? And the credit thing, where's the justice there? My kid had a life-threatening illness, which forced me into bankruptcy, and for that, I'm charged more than somebody who was lucky enough to have all of their medical costs covered within their insurance and ability to co-pay?

[HughMoran]

22. This is a really bad event

Guess my kids will have to pay for their own college - oh, well :(

[bluedem77]

28. Are you kidding me? They deserve an F

How can a company that just had to be bailed out by tax payers get a rating of A? That's preposterous.