Lex Baugh thanks brokers and risk managers for their support while former bosses tell US politicians what went wrong.
The chief executive of AIG UK, Lex Baugh, remained upbeat this week as the insurer’s US parent company confirmed that it would not sell the UK general insurance business.
As two former AIG chief executives, Martin Sullivan and Robert Willumstad, testified to the US Congress on Tuesday about how the world’s largest insurer came so close to collapse, Baugh issued a statement thanking brokers and risk managers for their support.
Hank Greenberg, former chairman and chief executive, was also due to testify but pulled out at the last minute.
Earlier in the week, AIG announced plans to focus on US property and casualty and foreign, including UK, general insurance business.
Numerous other businesses will be sold, including stakes in AIG’s non-US life insurance operations. AIG has already disposed of its 50% stake in London City airport.
Baugh said: “The announcement that the AIG group will move forward, focusing more closely on property/casualty insurance, is very good news for brokers and clients in the UK. We have had a great track record over the last 10 years and have grown the business by around 300%, servicing private individuals, SMEs and large corporate clients.
“Our focus now is to take the business forward. Even through this very difficult period, we have had many examples of client and broker support. Leading brokers and risk managers have been very thoughtful in their approach.
“We are in an excellent position to continue to serve our clients in these difficult economic conditions, and we are looking forward to having some great discussions with clients ahead of the January renewals.”
As Insurance Times went to press, two former chief executives were before the US?Congress, outlining the chain of events that led to AIG teetering near collapse before being saved by an $85bn loan from the US government.
Speaking to investors in a conference call on Friday, AIG chief executive Edward Liddy emphasised that the sale of assets was a “flexible process”.
“To the extent we have to borrow more from the Fed, we will realise more assets,” he said. “The world would like this to be very formulaic and precise, but it requires a fair amount of judgment and flexibility for us to do this well.”
Liddy also insisted that AIG was “doing very, very well in the marketplace,” adding: “Some of our competitors are trying to take advantage of this situation, but we are holding our own.”
Buyers back AIG
Insurance buyers are confident in the financial strength of AIG, according to a new survey.
More than two thirds (68%) of risk managers polled said they were very confident or somewhat confident of AIGs financial strength, a survey by insurance information company Advisen found.
But 71% of AIG commercial lines policyholders plan to get quotes from AIG competitors when their policies renew.
Advisen predicts that AIG will compete vigorously to retain business, potentially intensifying price competition in an already soft insurance market.