Four of the top property and casualty insurance executives atAIG defected to Berkshire Hathaway on Friday, April 26 in order tolaunch a top-flight competitor to AIG's market-leading surpluslines unit.

However, analysts and a top surplus lines industry lawyer in SanFrancisco discounted the impact the departures will have on AIG,which is currently the largest player in the U.S. surplus linesmarket.

“They can hire whomever they want to fill these spots,” saidRichard A. Brown, a top surplus lines lawyer and consultant, basedin San Francisco. “AIG has survived the resignation of Maurice“Hank” Greenberg, its former chairman, chairman, chief executiveand guiding spirit. They will certainly be able to survivethis.”

Jay Cohen, of Bank of America Merrill Lynch, also noted thateven with this new talent, it will take Berkshire some time to makeinroads on the surplus lines market.

Equally important, Cohen said, Bank of America Merrill Lynchviews the Berkshire move “as an indication of the attractiveness ofthe surplus lines business.”

He said that Lexington, AIG's main surplus lines vehicle,contributes 12.4 percent of AIG's total P&C premiums and 18percent of AIG's statutory U.S. P&C direct premium written.

Those leaving AIG to join Berkshire Hathaway were PeterEastwood, the head of AIG's U.S. property-casualtyoperations; David Bresnahan, president of AIG'sLexington unit; Sanjay Godhwani, president forLatin America and the Caribbean for AIG's property-casualtyoperations; and David Fields, another topproperty-casualty executive.

UPDATE: AIG Names Head of Lexington; Completes Transition After BerkshireDepartures

In order to deal with the departures, AIG over the weekendrecalled Robert Schimek from London to becomepresident and CEO of AIG Property Casualty's Americas region.

It also named Alexander Baugh to assumeresponsibility for AIG's global casualty business. He will reportto John Doyle, CEO of Global Commercial Insurance within AIGProperty Casualty.

Nicholas Walsh, who ran AIG's internationalproperty casualty businesses for many years, will become presidentand CEO of AIG's Europe, Middle East, and Africa region, succeedingSchimek on an interim basis as the company seeks a permanentsuccessor. Walsh is currently vice-chairman of AIG property andcasualty in New York. He will be moving to London on an interimbasis, company officials said.

Paul A. Newsome, managing director of insurance research atSandler O'Neill in Chicago does not think this personnel changewill be a critical issue for AIG. “Down the line it represents somecompetition for their excess and surplus lines, but that is it,”Newsome said. “They have had to deal with a lot of departures for along time.”

Cohen said in his investor's note that he did not believe themoves signaled anything negative about AIG but was likely promptedby a good opportunity for Eastwood and this team. Cohen said thatthe move would leave AIG with “several slots to fill,” but that thecompany has a deep enough talent pool to continue running itsbusiness as usual.

In its initial response, Matt Gallagher, a spokesman for AIG,said, “AIG has strong leadership in place. AIG has a seasoned andvery deep bench of talented property and casualty executives readyto assume broader responsibilities.”

Gallagher said that, “We have hired a number of strong industryleaders over the past few years, including in commercialunderwriting, specialty and aerospace, and our executives have thehard-earned experience of leading our business throughunprecedented times and circumstances.

“We continue to look to tomorrow and the opportunities ahead forAIG and our customers,” Gallagher said.

This morning, Peter Hancock, president and CEO of AIG PropertyCasualty, said in announcing successors to the departed executivesthat, “Rob, Nic, and Lex represent what is most powerful about AIG:a strong bench of seasoned property casualty experts with deepproduct and global expertise who work closely and tenaciously tohelp clients and brokers embrace opportunities and face challengesall over the world.”

Hancock noted that in the last several years, AIG has refocusedits business, improved its risk selection and is delivering“outstanding service” to its brokers and customers.

“I have every confidence that our people, through leadership,teamwork, and our knack for finding the answer, no matter howdifficult the problem, will continue to win on the merits in everymarket where we choose to compete,” Hancock said.