Chennai: As a part of its corporate restructuring, the Australian life insurance group has brought in Graham Meyer, customer services director, as the managing director of its Indian joint venture, AMP Sanmar Assurance Company.

Consequently the chief executive officer, SV Mony, has been elevated to the position of vice-chairman. While Mayer will look after the day-to-day activities, Mony will take care of the overall strategy. In addition B Natraj, an old hand at Sanmar group, has been appointed as chief operating officer.

Meanwhile, in the wake of corporate restructuring announced by the Australian group, Standard and Poor's (S&P) ratings services lowered the insurer financial strength and counter-party credit ratings on AMP Life to A+ from AA- and removed the ratings from CreditWatch (See 'Momentous happenings at AMP; Indian operations unaffected').

At the same time, the counter-party credit ratings on AMP Group Holdings and AMP Bank were lowered to BBB+ from A- and removed from CreditWatch. The ratings outlook on AMP Life, AMP Group Holdings and AMP Bank is negative, given uncertainty on the de-merger and capital restructure, and the uncertain earnings outlook for the AMP group, says Kate Thomson, credit analyst, Financial Services Ratings.

"The negative outlook on AMP Life, AMP Group Holdings, and AMP Bank reflects the inherent uncertainties surrounding the execution of AMP's plans, and the prevailing difficult operating environment for life and funds management companies in Australia and internationally, which is likely to constrain earnings. The high proportion of hybrid equity makes the AMP group more sensitive to earnings downgrades. If these risks are ameliorated, the ratings outlook could revert to stable from negative," says Thomson.

The insurer financial strength and counter-party credit ratings on AMP's UK life entities - Pearl Assurance PLC (Pearl), National Provident Life (NPL) and the NPI (NPI) - were also lowered and removed from CreditWatch, with the three entities now on negative ratings outlook. The ratings on Pearl and NPL were lowered to BBB from BBB+ and NPI was lowered to BBB+ from A.

The downgrades follow an overall weakening in the AMP group's financial strength and encompasses AMP's 1 May 2003 announcement of its intention to legally separate its Australian and UK business into two companies, raise capital of up to A$1.5 billion (proceeds now expected to be A$1.7 billion), pay down debt and sell equity investments held in its UK life operations.

"Although AMP's capital raising and equity sale initiatives will improve group capitalisation, the positive impact of these initiatives only partially offsets the diminution in group capital strength up to AMP's 1 May announcement. Furthermore, the AMP group's underlying earnings have been dampened by a difficult operating environment, and reported profitability marred by a material level of write-downs in the past six months," adds Thomson.