AAI Ltd.

The stable outlook on AAI reflects that on Suncorp's main operating entities. We expect the group to maintain a very strong business and financial position over the next 12-24 months, underpinned by its sound operating performance and excellent capital adequacy. We may lower the ratings on AAI over the next 12-24 months if we lower the ratings on Suncorp's main operating entities. This could occur if: We assess the competitive position of the group's P/C businesses to be weaker, potentially due to a material impact of poor underwriting or risk selection; or We view the group's prospective capital adequacy position has weakened. Although we consider it unlikely, we may raise the ratings on AAI over the next 12-24 months if

...AAI Ltd. is likely to maintain its solid underlying earnings generated across a range of brands in Australia's P/C sector. The insurer is the principal Australian operating company of Suncorp Group Ltd. (A+/Negative/--; core operating entities rated '##-/Stable/--') and is the largest contributor to the group's earnings. AAI maintains significant market shares in personal and commercial P/C lines, with operating performance that compares favorably with its peers'. AAI's very strong balance sheet should continue 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 conservative, in our view, with a low-risk investment portfolio. The insurer's mature risk-management framework, strong risk controls, and comprehensive reinsurance arrangements support our assessment. We expect AAI to benefit from extraordinary support...

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