Once again, AA&B editor Laura Toops speaks with John Q.Doyle, who will head up AIU's domestic property-casualty business,about what customers, agents and brokers can expect from the latestmove.

AA&B: You're the point man for communicating news toAIG's brokers and customers. What have you been telling brokersabout this latest move, and what has been theirresponse?

Doyle: We've been telling folks that we'veformed AIU Holdings Inc. for AIG's global property-casualtycompanies, and telling them why: to really take the first step inoperating more independently from AIG. We intend to completelyrebrand ourselves, appoint new management independent of AIG'sboard of directors, and create separation from AIG, distinguishingthe strength of our property-casualty business from the challengesof AIG.

The feedback I've gotten so far has been very favorable, bothinside and outside the company. Staff is excited about thedevelopments, and I've had the chance to talk to our risk managers,who have expressed appreciation for the move and are supportive ofanything that helps them again better separate our business fromAIG is welcome. Brokers have been very positive about it aswell.

AA&B: What will be the management structure of thenew entity?

Doyle: AIU Holdings will include about 44,000employees worldwide, in 130 countries, with $40 billion in revenuesand $43 billion in shareholder equity. It will be a stand-aloneentity the size of a Fortune 54 company--not the size of AIG, butlarge nevertheless.

Kris Moor, who has been with AIG for close to 30 years, wasnamed president; Nick Walsh, another AIG long-timer, will run AIU'sinternational operations, and I will oversee its domestic business.We will make some new appointments within the operation with thelong-term view of attracting third-party investors, but otherwiseAIU Holdings will be made up of the same people who have beeninstrumental in the success of AIG's worldwide property-casualtybusiness.

AA&B: Given the fact that most of AIG's more than$60 billion in fourth-quarter losses resulted from writedowns fromits commercial mortgage-backed securities, this seems like a smartmove. What are the main benefits of the formation of AIUHoldings--and are there any inherent risks involved?

Doyle: The global holding company will ownAIG's property-casualty companies is the first step in operatingmore independently from AIG. We will also look to attractthird-party investment in AIU Holdings for a minority stake.

Our main objective is to highlight the distinctions between ourwell-performing business and the challenges confronting AIG. Whenthe media are reporting on AIG, it's focused only on thesechallenges, so it's important in our marketplace from a brandingand reputation point of view to make sure our variousconstituencies--brokers, customers and staff--are well aware of theindependent strength of our companies.

The plan is to improve and enhance the value of our businessglobally, and we think this is an important step forward. Based onthe reception we've gotten so far, I think it will achievethat.

AA&B: Although brokers like AON have publiclysupported AIG's request for more TARP money, other groups areconcerned that continual government intervention will give AIG anunfair competitive edge. How are you addressing theseconcerns?

Doyle: Our businesses are well capitalized,liquid, and haven't required any TARP money to fund thecapitalization of our property-casualty businesses. The formationof AIU Holdings will better convey that message to ourmarketplace.

AA&B: Will AIU Holdings make a point of distancingitself from the AIG operations?

Doyle: We like the name AIU because it connectsus to a great history of underwriting around the world. We willdevelop subbrands, but remain connected to a great history. At thesame time, the establishment of AIU Holdings creates an opportunityfor us to distinguish ourselves from AIG.

New products are who we are; innovation is a hallmark of ourcommercial insurance operations. Over the last 6 months, even whenthe problems of our parent company were most acute, we continued tointroduce more than 20 new products and services.

AA&B: A hardening market seems inevitable, givencurrent insurer performances and the overall poor economy, how willAIU Holdings address this and still attempt to staycompetitive?

Doyle: We have a very broad product offering,and not all are equal in terms of the current margins. We have someproducts that need rate improvements and others that are operatingon satisfactory margins. We have seen pricing improvement in ourportfolio over the last 6 months, and we expect that to continue.The pricing pressure of the last 4 to 5 years also puts pressure onoperating margins; we will address this on a product-by-product andaccount-by-account basis to improve our pricing position during2009.