What's next for Chartis?
So it’s business as usual at Chartis, as plans for an IPO seem dead in the water. The business formerly known as AIG UK has longed for stability, but it looks set to remain in the shadow of its embattled US parent for a little while longer. But the question the market will be asking next is: just what is AIG is planning to do with Chartis now?
According to reports in recent months, AIG’s chief executive Robert Benmosche has big plans for Chartis and has made it clear to his peers that it is too early to get rid.
But little more than six months ago, Chartis UK chief executive Lex Baugh, in an interview with Insurance Times, spoke openly about the fact that AIG was positioning Chartis for a flotation by the end of this year, as it needs to pay back loans worth more than $180bn (£118bn) to the US government.
Confused? AIG has yet to go public about the future of Chartis, but Baugh’s admission says it all.
So what about Baugh? He was the man at the forefront of AIG in the UK market when the proverbial hit the fan. He’s seen it all and has felt the pain, but the pressure could be about to rise if AIG wants to beef up Chartis's value before a potential sale or listing in the future. It will certainly demand improvements in its 2010 results, after a mega fall in pre-tax profits from £324.3m to £83m last year. However, is Baugh optimistic about the future?
“I don’t have that crystal ball in front of me,” he told Insurance Times. “But I think if you look at the analysts’ reports that are coming out now, they’re trending up and that gives me confidence about the future.”
And what does it mean for brokers? The broker market has already had to deal with the fear of a financial meltdown at AIG until it was rescued by the US government. It has continued to back Chartis but, like many, it would have been looking forward to a new chapter after an IPO. Chartis has a new UK boss in James Shea, but it will be Baugh whom brokers look to for answers, and even he can't predict the future. So who can? AIG, it’s over to you.