Capital and solvency are crucial to insurance ralationships, according to Martin Sullivan, co-chief operating officer and vice chairman of AIG.
Speaking at the CII conference, Sullivan criticised London market brokers for overplacing slips and signing down the proportion of the risk held by each insurer. He said the practice was "nonsense" particulalry as brokers did not take into account each insurers financial strength. "It amazes me that a triple A rated company could be signed down to accomodate companies that are less secure," Sullivan said.
He said financial strength was also a crucial factor for clients to consider when choosing an insurer. "As far as I'm aware you can't pay claims out of goodwill," Sullivan said.
He said that in order to maintain high levels of capital and attract capital investment into the industry it was crucial for insurance companies to get "back to basics" and continue underwriting for profit.
