But survey finds risk managers will look for competitor quotes on renewal
Insurance buyers are confident in the financial strength of AIG, according to a new survey.
Over two thirds (68%) of risk managers polled said they were ”very confident” or “somewhat confident” in AIG’s 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.
Last month AIG received an $85bn loan from the US Federal government to prevent its collapse.
David Bradford chief knowledge officer of Advisen said: “Many insurance buyers recognize the crisis at the AIG ultimate parent level didn’t affect the solvency of the insurance subsidiaries, but nonetheless there was immediate reaction among brokers and buyers to look at all options.
“After the federal loan was secured, it’s clear that the marketplace responded with support for AIG. Still AIG will have to fight to keep its book of business and this fight will likely drive further reductions in premium pricing.”
Advisen said some buyers were concerned that the AIG companies could be damaged by the loss of too many policyholders, defections of key personnel, by a further rating agency downgrade or by being sold to lower rated companies. But despite these concerns, there ws a deep reservoir of good will towards AIG, it said.
Survey respondents were also generally complimentary about how their brokers have handled the crisis.
The survey was based on comments from 1,000 respondents, 84% of whom had insurance decision-making authority for their companies, of which 76% identified themselves as risk managers.
