AIG president says brokers have a "unique role to play" in providing solutions in emerging risk markets
The insurance industry must increase its focus on emerging risks, or risk losing business, Martin Sullivan, AIG chief executive and president has warned.
Speaking at the opening of the 2007 Biba Conference, Sullivan said that brokers had a "unique role to play" in providing solutions for consumers in emerging risk markets.
"If we don't respond, someone else will. Businesses can and will look elsewhere for solutions," he said.
Sullivan singled out the growth of the directors' and officers' ( D&O), political risk and environmental markets as seams that should be tapped.
The insurance market was "more stable and more profitable than ever", but warned that much work remained to be done.
"It is not the time for complacency, not for underwriters to declare victory," he said, adding that the industry faced "significant and deep challenges."
Sullivan said that aggressive targets and the pursuit of market share were strategies "all too often pursued without the appreciation of the need to maintain disciplined underwriting standards".
He stressed that insurers must remain both vigilant in the face of new legal and environmental challenges, and diligent in the risks they choose.
"We are an industry that has finite capital controlling infinite risk," he said.
However, he declared that insurers could take the lead: "Insurers do not have to let their business practices be put at the whim of the market. Don't follow the herd. Find your markets and expand into niches."
On a related note, Sullivan congratulated insurers on playing a greater role in managing risk.
And despite spending over ten years working in New York, Sullivan maintained that "London is the place to do business."
