Chief executive Lex Baugh has to fight to save firm's reputation
AIG UK is a standalone company that must be viewed separately to its parent, says chief executive Lex Baugh. That may be the case. But it is not an easy task to convince customers and the market that AIG UK will not be affected by AIG’s problems.
How do customers of AIG UK feel when they read that the parent is expecting the largest quarterly loss in global corporate history? What do brokers think when they see staff from the financial lines team defect to a rival insurer?
Brokers build up relationships with underwriters they trust, so to see them disappear to rival firms must be concerning. They then have to place business with new underwriters, but are they of the same calibre as the one who have left?
Customers who read about AIG’s debt problems must wonder, understandably if perhaps erroneously, whether the whole shaky edifice will come crashing down and leave them without cover.
The overall effect is to further take away the sparkle from what was once considered the greatest insurance institution in the world. No matter how seemingly separated AIG UK is from the parent, its reputation is severely dented.
A large part of Baugh’s job is now public relations. All he can do is keep on pounding out the message that AIG UK is a sound business, and whatever happens, it's not going to renege on any deals while offering competitive rates. Oh, and it’s not going to be sold off next week.
Meanwhile, he prays Ed Liddy’s vision of scaling back the company to its core property and casualty business can come true. That way the US Government gets its money back, while the slimmed down AIG brand lives on.