AAI Ltd.

AAI's business profile will likely remain slightly weaker than that of higher-rated peers over the next two to three years. We reflect this in the lower 'aa-' anchor selection. A rating at the higher anchor would likely recognize broader business diversity. The stable outlook on AAI reflects that on Suncorp's core operating entities and our expectation that AAI will remain a core subsidiary of the group. As the group's primary operating company and the largest contributor to its earnings, AAI's stand-alone credit strengths drive the GCP. These strengths include sound risk-based pricing and underwriting capabilities, and a relatively conservative investment profile and risk retention appetite. We also expect robust capital adequacy at the group level to buffer natural peril claims.

...We believe AAI Ltd. will maintain its position as one of the leaders in Australia's P/C sector. The insurer, which is the principal operating company of Australia-based Suncorp Group Ltd. (A+/Negative/--; core operating entities rated ##-/Stable/--), maintains significant market shares in personal and commercial P/C lines. In particular, the group maintains a top two market share in Australia's largest lines of home and contents, and motor insurance. AAI's robust capital adequacy and sound earnings will continue to underpin its stand-alone credit strengths. The insurer has very strong capital adequacy, based on S&P Global Ratings' insurer risk-based capital model. Capital resources are supplemented by access to considerable financial resources at the group. AAI also has consistently delivered sound operating performance that compares favorably with its domestic peers. We believe AAI would benefit from extraordinary support from Suncorp Group Ltd., if needed. The insurer is the group's primary...

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