Standard & Poor’s Corp. has revised its outlook for insurer American International Group Inc. to stable from negative.
The change reflects the New York-based rating agency’s view that AIG will maintain and improve its ability to service debt using earnings.
S&P said that it expects AIG to post pretax operating income of about $10 billion a year from 2013 through 2015, compared with an average of about $5.5 billion over the past three years, and the company should see a combined ratio of between 100% and 102%.
Stronger operating income and declining debt reducing interest expenses will support AIG’s fixed-charge ratio, which is a measure of a firm’s ability to meet its debt obligations using earnings, the S&P report said.
AIG’s liquid asset position remains strong, S&P added.