NU Online News Service, May 9, 10:00 a.m. EDT

The head of American International Group's commercial-insurance division says the bailed-out insurer's reputation is not an issue, and, in fact, competitors may have erred by not working harder to take AIG's insurance business when it was on the verge of collapse.

John Q. Doyle, chief executive officer of global-commercial business at Chartis, AIG's property and casualty unit, says competitors “made a mistake” and “underestimated how important we were to our customers,” following the credit crisis in 2008.

“They didn't manage through it,” adds Doyle, speaking at the UBS Global Financial Service Conference inNew York. He says competitors may have “expected business to run to them.”

In 2008, though, Doyle had acknowledged and criticized what he saw as competitors' efforts to take advantage of the uncertainty surrounding the AIG liquidity crisis. Doyle had made those comments during a Risk and Insurance Management Society (RIMS) webinar in September 2008, after some companies had changed their positions regarding writing excess policies over AIG primary policies, or writing co-surety policies with AIG. Doyle defended his company back then by pointing to state-regulator statements regarding the strength of AIG's insurance operations.

Asked at yesterday's UBS Global Financial Service Conference if there were any lingering reputational problems preventing Chartis from seeking rate increases, Doyle says there is “no reputational issue in our P&C business, anywhere.”

To illustrate the point, Doyle adds that Chartis' international operations are “begging us to rebrand as AIG.”

In July 2009, AIG gave the name Chartis to its P&C commercial unit, AIU Holdings.

Addressing speculation that AIG underpriced business following its troubles in order to keep accounts, Doyle said yesterday it was less about pricing during the credit crisis and more about “whether a broker or customer had confidence in our future.”

Doyle told analysts Chartis has no worries about its prior-year loss development and “feels good about its reserves.”

In late 2008, some insurance executives had accused AIG of cutting prices to keep business. Former Liberty Mutual President and CEO Ted Kelly had said at the time that AIG was “doing some very stupid things” by intensifying efforts to increase, or at least preserve, market share.

Similar statements were made by ACE CEO Evan Greenberg and former Ironshore CEO Robert Deutsch.

Doyle, speaking in December 2008 at the 20th Annual Executive Conference for the Property-Casualty Industry, rejected the accusations saying it is curious that AIG is being singled out when his top line was down 7 percent during the 2008 third quarter while some carriers criticizing AIG had increased their top lines during the same period.

For 2012, first-quarter operating income at Chartis was about $1 billion, compared to a net loss of $424 million last year, as catastrophe losses the first three months were $80 million as opposed to $1.7 billion booked a year ago.

AIG leadership has set several goals for Chartis, including a return on equity of 10-to-12 percent and a combined ratio in the 90 to 95 range by 2015.

Doyle says Chartis will look to grow its consumer segment, especially outside of theUnited States, while taking aggressive actions to get rate increases or drop unprofitable commercial business.

Comparing the first quarter this year to the same period last year, net written premiums in commercial dropped 9 percent while rising 5 percent in consumer.

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