Standard & Poor’s (S&P) and Fitch have maintained their ratings on IAG.

S&P in December affirmed IAG’s A+ issuer credit rating and the AA- issuer credit and financial strength ratings on the group’s core operating entities, with a stable outlook.

It says the ratings reflect IAG’s very strong position in Australia and New Zealand, very strong risk-based capital levels and prudent reinsurance and reserving practices. 

It notes the UK businesses that have dampened the group’s earnings are being sold.

Fitch also affirmed its ratings for IAG and IAG New Zealand as AA- with a stable outlook.

The agency says this reflects “IAG’s dominant and strengthened market position in its core markets, solid franchise and brand strength”. Fitch views the UK sale as neutral.

Meanwhile, IAG has released details of its catastrophe reinsurance program for this year, providing limits of $5 billion, compared with $4.7 billion last year.

“The structure of the program is similar to that for 2012 but includes increased coverage, both at the upper end of the main program and with respect to the aggregate cover,” IAG CFO Nick Hawkins said.

He says the cost of the program is in line with the company’s assumptions and will allow it to meet its target insurance profit margin of 11-13%.