An AIG executive said recent changes in some competingcompanies' positions regarding writing excess policies over AIGprimary policies, or co-surety policies with AIG, are not based onmarket realities.

Competitors are trying to take advantage of the uncertaintysurrounding the AIG liquidity crisis, suggested John Doyle,president and CEO of Commercial Insurance at AIG.

His remarks came during a Risk and Insurance Management Society(RIMS) webinar, "Risk Management Strategies in an UnsettledFinancial Market."

Regarding information revealed yesterday in a Marsh conferencecall that Travelers and Chubb would no longer write co-suretypolicies with AIG as a partner, Mr. Doyle said other companies hadtaken similar positions in other lines of business, but it "quicklydissipated," and he added state regulators have not been happy withthe actions of those companies.

Mr. Doyle said almost all state regulators have releasedstatements speaking to the strength of AIG's insurance operations.The conglomerate's non-insurance business problems have forced itto obtain an $85 billion line of government credit in exchange forsigning over a 79.9 percent interest in the firm.

His statements came as he sought to clear up questions regardingthe financial strength of AIG's insurance operations amid thefinancial turmoil surrounding the parent company.

Mr. Doyle said the insurance operations are strong, and addedthat the events over the last 10 days have never been about theinsurance companies at AIG. Rather, he said, the problems havecentered on products written by AIG Financial Products, which ispart of the company's financial services operation and is outsideof the insurance companies' domain.

He said the insurance companies' assets minus obligations arethe largest of any insurance company in the U.S., and that thefinancial strength and capital is greater than any of AIG'scompetitors.

The insurance operations are still taking on risk, and stillpaying claims, he added. If AIG had been forced to file forbankruptcy, Mr. Doyle said, the insurance companies would not havefollowed suit.

One inquiry from a webinar listener, relayed to Mr. Doyle bymoderator Sam Friedman, editor in chief of National Underwriter,questioned why, if AIG's commercial insurance operations are soundand profitable, AM Best downgraded the company to "A" from"A-plus."

Mr. Doyle said he is in dialogue with the rating agency, andnoted that Best had questions about whether the commercialinsurance operations would be broken up. He pointed to recentstatements by new AIG CEO Edward Liddy affirming that commercialinsurance operations will not be sold and are core to thecompany.

Mr. Liddy will be holding an investor conference call nextFriday to outline the company's strategic vision regarding whichassets will be sold to pay off the federal loan, Mr. Doylesaid.

Representatives for FM Global and Zurich North America alsoparticipated in the webinar, and answered questions regarding theirviews on the AIG bailout and whether their appetites for risk wouldchange given AIG's current situation.

Ruud H. Bosman, executive vice president of FM Global, said fromFM Global's perspective in commercial property insurance, there wasno reason for the bailout. Buyers would have been fine with orwithout the bailout, he said. He noted there are otherinterconnected consequences that the government considered that heis not privy to, and he was speaking just from a commercialproperty perspective.

Regarding a change in appetite, Mr. Bosman said FM Global iscommitted to its corner of the specialty market, but that thecompany could be looking to expand its business inside that market.Such a decision, though, would be based on FM Global's balancesheet rather than what is happening with competitors.

Commenting on the AIG bailout, Mike Foley, CEO of North AmericanCommercial Operations at Zurich, said, "These are unprecedentedtimes that we're living in, and very complicated issues."

He said he supported the government's decision. From aninsurance perspective, he said the bailout was good in that itbrought stability to the industry that may not have been there ifthe company had not received a loan.

On competing for AIG's business, Mr. Foley said Zurich hastraditionally competed with AIG on many lines, and would continueto do so. As for any change in strategy, he said Zurich willevaluate whether there are capacities that it wants to take higherlimits on, but the company's overall business strategy has notchanged.

To listen first hand to the RIMS webinar, go tohttp://cf.rims.org/Template.cfm?section=Education&Template=/CourseDirectory/CDcoursesDescription.cfm&Course=526.