AAI Ltd.

The stable outlook on AAI reflects that on Suncorp. We expect the group to maintain its business and financial strengths over the next 12-24 months, with sound operating performance and excellent capital adequacy underpinning this. We may lower the ratings on AAI over the next 12-24 months if we lower the ratings on Suncorp. This could occur if: We assess the competitive position of the P/C businesses as weaker, potentially due to a material impact following poor underwriting or risk selection; or Our view of the group's prospective capital adequacy position weakens. Although we consider it unlikely, we may raise the ratings on AAI over the next 12-24 months if we were to raise the ratings on Suncorp. We base

...AAI Ltd. is likely to maintain its solid underlying earnings generated across a range of market-leading brands in Australia's P/C sector. The insurer is the principal Australian operating company of Suncorp Group Ltd. (A+/Stable/--; core operating entities rated '##-'), which has insurance operations across Australia and New Zealand, and banking services in Australia. AAI maintains significant market shares in personal and commercial P/C lines and remains the largest contributor to the group's earnings and risk profile. AAI's very strong balance sheet continues to underpin its stand-alone credit strengths. The insurer has robust capital adequacy based on the S&P Global Ratings capital model, supplemented by access to considerable financial resources at the group. AAI's risk appetite is relatively conservative, in our view, with a low-risk investment allocation for technical reserves. The insurer's comprehensive risk-management framework, strong risk controls, and well-developed reinsurance...

Full Report