S&P has affirmed its A credit rating on IAG and its AA- ratings on IAG’s core operating subsidiaries. The outlook is stable.

The ratings agency also affirmed its credit ratings on all of IAG's outstanding hybrid issues.

“The stable outlook reflects our view that IAG's business and financial position will remain very strong over our forecast period into 2021,” S&P says. “Given IAG's robust competitive advantages in its home markets and high degree of risk protection, there is some flexibility for maintaining the AA- ratings even under a weakening financial risk profile.”

IAG will maintain its significant and defendable local market position and very strong capital metrics, S&P says.

Its diverse suite of brands and distribution channels across Australia and New Zealand, along with ongoing marketing and technology advances, will capture and retain quality business.

The scale advantage of Australia’s largest listed local insurer, with underwriting expertise and more than $12 billion in gross written premium in the full year to June 30 2019, “contributes to an operating performance better than its peers”.

“We view IAG's capitalisation as robust, with very strong capital resources and increased reinsurance covers contributing to ongoing earnings and capital stability,” S&P says.