Insurer is "grateful for tremendous support", says boss Baugh
AIG UK’s combined ratio slipped to 91.9% in 2008, from 89.2% in 2007, the insurer has revealed.
“The underwriting results for AIG UK have held up very well, and our combined ratio of 91.9% reflects a strong underwriting culture,” said Lex Baugh, chief executive of AIG UK.
“We are very grateful for the tremendous support we have received from our brokers and customers during this time.”
The British insurer has been hived off to a holding company, AIU, as part of a restructuring of its US parent company.
AIG UK’s gross written premium was unchanged at £2.3bn. Baugh said the figure reflected well on the company’s pricing discipline and client retention. “Like the rest of the market, we experienced softening rates in all classes for most of 2008,” he said.
“However, towards the end of the year, rates generally flattened and in some areas started to increase – a trend we expect to continue in 2009.”
Baugh said retention levels were broadly in line with those of 2007/8.
“Our major accounts practice tracks our retention level very closely and, at over 95% currently, it is very encouraging,” he said.
Baugh denied that concerns about the parent company had affected AIG UK.
“Recent independent market research among clients and brokers found that they still recognise that we offer the same expertise, creative problem-solving and excellent claims handling as we always have. We continue to work very hard to demonstrate that the expertise which made AIG UK competitive and profitable continues to be true.”
AIG UK will publish its full annual report and accounts in April 2009.
The insurer has maintained its credit ratings, which stand at A+ with Standard & Poor’s, A1 at Moody’s and AA- at Fitch.
Separately, AIG Group has come in for heavy criticism this week after it was revealed that $52bn (£37bn) of government bailout money went to European banks.
AIG provoked further fury by paying $165m in bonuses to executives in the business unit that has been blamed for bringing the company to the brink of collapse.
The group said it was contracted to pay the bonuses.