Lex Baugh moves to reassure the market
AIG UK chief executive Lex Baugh has broken his silence and moved to reassure the market's concerns over the future of the insurer.
In a statement Baugh told Insurance Times: “We are receiving tremendous support from our brokers and clients, both through the comments that they are making publicly and in the many meetings that we have had with them. We have found them to be very considered in their response to the changing circumstances in which we find ourselves. Last week was one of the busiest weeks of this year in terms of both new and renewed business.
Baugh added that AIG UK operated separately from the loans given by the US government. He added: “AIG UK Limited is a separate legal entity, regulated in the UK by the FSA and is therefore distinct from AIG Inc – to whom the loan facility was given. As a separate company AIG UK Limited retains assets and capital to meet its UK policy obligations ensuring continued protection for its policyholders. It has capital of over £900 million, and continues to comply with all applicable regulatory requirements. In terms of financial security, we have a financial strength rating of A+ from a major rating agency.”
Baugh played down speculation that the business would be sold in the near future. He reiterated the line from global CEO, Edward Liddy and pointed out that Liddy had referred to AIG UK amongst a group of other businesses as “core to the business” and described them as “keepers”.
Baugh added that the financial problems at the parent company were not about the performance of the insurance subsidies. He said: “In areas such as writing new business and paying claims it is very much business as usual here in the UK. The strengths of this business remain the same today as they were before – underwriting, product development and our ability to meet clients’ need. None of that has changed, nor will it.”
He said: “In terms of claims- on average we pay out £4.5 million every working day, and the last week or so has been no exception. Our claims team has been working hard with policyholders affected by recent floods to get them back in business as soon as possible.”
He added: “Our ability to trade is absolutely undiminished by recent events and AIG UK is still generating significant positive cash flow. Our staff have been fantastic through what has been a very uncertain time, but they are now focused on doing what they are best at; helping clients with risks or claims. For example, we have new product launch this week that is going to help private companies and their directors meet substantial increases in liabilities. ”