As I watch in amazement the unraveling of AIG - - I begin to wonder what activities and shifts will this create in our industry - - - -Below is just a series of thoughts and comments. As always, I welcome you feedback as well.
·There is significant pressure for Insurers - especially publicly traded companies – to have sustainable profitable growth – the mutual firms are all looking back and saying, glad we are still a mutual.
·Especially during a soft market – the returns of P&C are not ‘tolerable’ for many stockholders/stakeholders - - - think of the Citi Travelers’ sale of the P&C.
·Some insurers - -are extensively diversified - - -beyond the transition P&C and L&A - - -bringing sometimes a great balance for growth - - but also sometime extremes risks
·AIG forces us all to look closely at the scope of diversity in the Diversified Financial Services mega players - - - this may span a renew interest to keep insurance companies in the space of insurance via regulation
· It’s amazing that a company with $1 trillion in assets – and strong core insurance business - - -could go bankrupt with one bad business/investment decision – so fast.
·How many more smaller companies – like AIG are there out there?
·This AIG crisis could help trigger a hard market sooner than anticipated
·This AIG crisis may trigger a series of liquidation/sales/acquisitions of some of its assets/companies - - once again shifting the US insurance competitive landscape with the mega players
·Specific to AIG and the government ball out - - If AIG were to fail - - - ->>>>>> the economics and business implications would be significantly - -globally - -but just looking at the US market for technology - - ->>>>and the external IT spend of AIG alone - - - probably close to $1b a year - - there would be a overflow of unemployed consultants and technologist on the streets…
·This will be a humbling experience for the AIG leaders and employees - - at all levels - - or I at least hope so!
· Side note - - many of the mid tier carriers were starting to note - - how AIG was ‘getting’ into their territories in personal and small commercial business- - -will this slow AIG down with this uncertainty creating lack of clarity and focus.
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