SAN FRANCISCO (MarketWatch) -- Influential insurance industry rating agency A.M. Best said late Monday that it has downgraded the ratings of American International Group AIG, -1.23% because of a "rapid deterioration" in the insurer's financial strength and flexibility. "AIG's lack of liquidity at the holding company level and management's need to secure funding options are not representative of financial stability and not reflective of AIG's current ratings," A.M. Best said in a statement. The financial strength rating of AIG's domestic life and retirement services subsidiaries was cut to A (Excellent) from A+ (Superior). The issuer credit rating of that unit was downgraded to a from aa, the agency said. AIG's domestic property and casualty subsidiaries suffered similar downgrades from A.M. Best.