Posted On: October 12, 2008, 3:33 pm CDT

Posted By: Scooby

I don't believe commercial lines is or will be profitable. I admit, I haven't looked at AIG's financials. I'm generalizing because of what I know about commercial lines from experience. If an underwriter prices an account correctly, he will loose the account because of other incompetent carriers underpricing it. What good is booking a $100,000 premium which will with high probability produce losses that exceede the premium? The reason is that incompetent u/w managers push to get premium on the books even if the accounts are money losers! Then they tell premium audit to not only be an auditor but to also re-underwrite the risk. If the auditor who is always told to produce, produce, produce does his job, then the correct premium and codes will be used. But why should an auditor spend the time to do this when he will be chastized for not doing enough audits????????? Bottom line, the professionalism is gone in the industry. The emphasis has been on the streamlining of processes with no human intervention. Thus, agents and insureds try to circumvent the system to achieve premiums that are less than other carriers while the carriers suffer the losses due to incompetent managers. WHO IS BOOKING BUSINESS WITH AIG NOW? What happens to your E & O exposure if they go under leaving an insured without the protection they thought they were getting? If your not booking with AIG, then what exactly is going to happen to AIG's future revenue stream? What exactly is the U.S. treasury buying, a defunct company with an impaired future revenue stream?