S&P Affirms AMP ‘AA’ Ratings, Outlook Negative

July 3, 2001

Standard & Poor’s affirmed the double-‘A’ counterparty credit ratings and insurer financial strength ratings on the principle operating entities of Australian insurer AMP, but changed the outlook from stable to negative.

“AMP’s Australian market position remains very strong,” said the report; “However, the challenges associated with the integration of AMP’s U.K. operations are significant, and recent heightening of industry competition and margin compression adds some urgency to AMP’s need to restructure and lower costs.”

“The double-‘A’ ratings on the AMP group companies reflect the the group’s superior business position in its home markets of Australia and New Zealand, and the breadth of business in the more challenging U.K. market, which now comprises nearly two-thirds of the group’s assets, ” S&P stated. It added that “AMP’s financial profile is underpinned by a high degree of financial flexibility, and capitalization remains very strong, supported by solid capitalization in its key operating entities of AMP Life, Pearl and NPI.”

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