A survey of insurance brokers has found them more confident than risk managers about the financial security of American International Group commercial insurance units.
The polling was done by New York-based Advisen Ltd., an insurance industry content, analytics and technology provider, after the AIG liquidity crisis and following a similar survey of risk managers.
The firm sought to measure brokers' confidence in AIG after the company secured an $85 billion federal government loan. Seventy-five percent said they were "very confident" or "somewhat confident" in AIG security.
Advisen said "the vast majority of brokers characterized the attitude of their clients as 'wary' about the unfolding situation at AIG, but with only one respondent claiming that clients are 'panicked,' most brokers of commercial insurance are confident in AIG after the federal loan and few are recommending clients switch from AIG."
The survey of risk managers by Advisen found that about two-thirds intend to get quotes from AIG's competitors at policy renewal, but according to the broker survey, few buyers have yet given their broker firm instructions to replace AIG.
Brokers also opined in survey results about the potential impact the insurance pricing cycle and the potential impact on their fee and brokerage income.
"Survey results show that brokers have communicated to policyholders that AIG's insurance subsidiaries are secure," said David K. Bradford, Advisen executive vice president and chief knowledge officer.
However, Mr. Bradford said that "while brokers have been a force for calm in the marketplace, survey responses indicate that brokers don't yet know how much diversification clients will seek, or whether this crisis will impact overall market pricing or brokerage income."
Advisen conducted its survey from Sept. 26-30 with 611 respondents. Almost 65 percent of those polled described themselves as "executive management." Eleven percent classified themselves as "producer," and a similar number as "marketer/broker." Almost 20 percent of participants worked for one of the four largest brokers.
About 80 percent said that AIG writes less than 20 percent of the business they place. The class of business most often placed with AIG is management or professional liability, according to nearly 75 percent of respondents.
Twenty-three percent in the survey said they had offered to get quotes to potentially replace AIG, while 23 percent said they recommended no action at present. Thirty-eight percent said they provided information only, 14 percent took "other" unspecified action, and 2 percent had not contacted AIG policyholders.
Brokers said 1 percent or fewer of their clients directed them to replace AIG at renewal, and even fewer asked that AIG be replaced midterm. Opinion was nearly split on whether AIG will be forced to sell its core commercial property-casualty business, with 46 percent saying yes, 42 percent no, and 12 percent with no opinion.
"In conversations with brokerage firm executives attending this week's CIAB Insurance Leadership Forum the story lines are the same as when we surveyed brokers a week ago," Thomas P. Ruggieri, Advisen chief executive officer, said from the conference in Henderson, Nev.
"Execution risk of the asset sales has been cited as a common concern among brokers. They also worry about potential of breaking up the commercial P&C units. While brokers are watching ratings actions carefully, they are comfortable with the present security of AIG's property and casualty subsidiaries."
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