Chartis can almost stand-alone

Chartis is close to separating from AIG chief financial officer Robert Schimek has said, Dow Jones reports.

"We want to have the ability to raise capital easily and have financial flexibility" separate from AIG, Schimek said at an insurance conference in New York Thursday.

Chartis will prepare separate financial statements for the year and will seek a credit rating. "We want to be able to access the credit markets without depending on" AIG, he said.

Weak economy

Schimek blamed the decline in premiums to the weak economy, and said that after adjusting for the sale of its Brazil operations, the effect of foreign exchange, and the company's pullback from the workers' compensation business, the decline in net premiums worked out to about 6%, "which is in line with the market," he said.

He said he expected "a reasonably soft market" to continue in insurance pricing. His comments come in contrast to some competitors, who have charged that AIG is the one that is undercutting prices.

He denied staff had left because of pay controls on AIG. "People will move on in their careers whether or not we have the AIG situation," Schimek said. "The silver lining is that a lot of people have stepped up into new roles. So there have been as least as many positive moves as a result of headline departures."

No employees lost

Reuters said Shimek had said Chartis had not lost any employees because of pay limits imposed by Washington.

Schimek estimated that about 20 of the 100 senior managers affected by the pay restrictions work for the global property-casualty division.

Not under-pricing

Bloomberg reported that Shimek had said Chartis will lose sales rather than cut rates to unprofitable levels, contrary to claims by rivals that it’s under-pricing insurance.

“We are in an organisation that has walked away from premium,” Schimek said. He said comments from the likes of Chubb were “based off their frustration we didn’t go away.”