But few clients have given brokers instructions to replace AIG
Advisen has released a special report based on a survey of brokers following the American International Group (AIG) liquidity crisis. Following a similar survey of risk managers, Advisen sought to measure brokers’ confidence in AIG after the $85 billion loan by the federal government. “Wary” was how the vast majority of brokers characterized the attitude of their clients towards the unfolding situation at AIG, but with only one respondent claiming that clients are “panicked”, most brokers of commercial insurance are confident in AIG after the federal loan and few are recommending clients switch from AIG.
The Advisen survey of risk managers found that about two thirds intend to get quotes from AIG’s competitors at policy renewal, but according to the broker survey, few buyers have yet given their broker firm instructions to replace AIG. Brokers also opined in survey results about the potential impact the insurance pricing cycle and the potential impact on their fee and brokerage income.
David K Bradford, EVP and chief knowledge officer of Advisen, said: “Survey results show that brokers have communicated to policyholders that AIG’s insurance subsidiaries are secure. However, while brokers have been a force for calm in the marketplace, survey responses indicate that brokers don’t yet know how much diversification clients will seek, or whether this crisis will impact overall market pricing or brokerage income.”
This special report is based an exclusive survey conducted by Advisen from September 26th-30th with 611 respondents Almost 65% of respondents described themselves as “executive management”. Eleven percent classified themselves as “producer,” and a similar number as “marketer/broker.” Almost 20% of participants worked for one of the four largest brokers.
Thomas P. Ruggieri, chief executive of Advisen, said: “In conversations with brokerage firm executives attending this week’s CIAB Insurance Leadership Forum the story lines are the same as when we surveyed brokers a week ago. Execution risk of the asset sales has been cited as a common concern among brokers. They also worry about potential of breaking up the commercial P&C units. While brokers are watching ratings actions carefully, they are comfortable with the present security of AIG’s property & casualty subsidiaries.”
