Top-level revamp at AMP Sanmar; S&P lowers group's rating

Venkatachari Jagannathan
15 May 2003

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.