An independent insurance agent association expressed concern that the troubles related to American International Group may create a false public perception that insurers have been engaging in the same risky transactions as banks and lenders.
Neal Sullivan, chairman of the Independent Insurance Agents and Brokers of New York (IIABNY) and president of Sullivan Financial Group in Mahopac, N.Y., said that AIG being in the news alongside names such as Lehman Brothers may "send the wrong message to consumers" that p-c insurance companies are mixed up with other Wall Street companies in the mortgage crisis.
Mr. Sullivan said property-casualty insurers are not into the type of business that has created the crisis, and he noted that even in AIG's case, many of the problems stem from investments, rather than actual insurance risks.
He characterized the p-c industry as "conservative" and not typically interested in risky lines of business.
Speaking to how the agent community is responding to the uncertainty surrounding AIG, Mr. Sullivan said he has not seen panic among agents, but that he would hope anyone representing AIG would be on the phone with the company to make sure clients' investments and assets are protected. "Whether they can get an answer or not, I don't know," he added.
He recommended that agents call their customers as well to share any information obtained.
Mr. Sullivan said he has a few AIG customers, but not many. He has not received any calls from his AIG clients expressing concern about the financial state of the insurance giant.
If AIG does not receive the capital it needs to weather its current financial problems, Mr. Sullivan speculated that the insurance industry would be healthy enough to absorb the insurer's business, given the current level of competition.
He noted that many of the unique risks that AIG is known to insure may have a more difficult time securing coverage, but given the soft market, he predicted that even they would eventually find a carrier willing to write the business.
Other brokers and agents were not willing to speak at length about AIG's current status, saying they would prefer to see what becomes of the insurer.
A representative from Aon said the brokerage is monitoring the situation. Aon was hosting a client call late in the day to discuss the situation and answer questions.
A Willis representative said the brokerage would not comment on the situation at this time.
A call to Marsh seeking comment was not returned.
The Professional Insurance Agents of New York released a statement it is sending to its members saying it is monitoring the situation, but did not comment beyond that, preferring to wait for further news on the status of AIG.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.