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Moodys affirms Girbraltar Life’s IFS after merger

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Moody’s has affirmed the A2 insurance financial strength (IFS) rating of Gibraltar Life Insurance following its merger with AIG Edison and AIG Star Life. The rating outlook of Gibraltar Life remains positive.

At the same time, Moody’s affirmed and withdrew the IFS rating of AIG Edison because of a reorganisation of the company and its merger into Gibraltar Life. Early in 2011 Gibraltar Life’s parent company, Prudential, completed an acquisition of AIG Edison and AIG Star.

In their rational, Moody’s said they affirmed their rating because the consolidated company’s credit situation after the merger remained essentially the same as the individual companies. In saying this, Moody’s also recognised the improved business profile of the group as a result of the merger, which was their reason for the positive outlook.

The ratings company went on to predict the consolidated company will continue to see healthy growth in the new year.

Following the merger, Gibraltar Life’s market share will increase by maintaining the business base of the three insurers which do not overlap with each other,” Moody’s said in their report.

The ratings company also said that, in the short term, the deal would actually weaken Gibraltar Life’s asset quality, but “the continued rebalancing of the combined investment portfolio should help improve asset quality over time.”