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Regulators: AIG Not Using Bailout Funds to Underprice Insurance
National News • March 18, 2009
Despite some complaints by competitors, American International Group (AIG) does not appear to be using federal bailout funds to lower its insurance prices to keep and attract business, state and ...
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| Subject | Posted By | Posted On |
|---|---|---|
| RE: Here is what is really happening... | Vlad | Mar 23, 2009, 9:47 am |
| Filings | Sam the Filer | Mar 19, 2009, 1:00 pm |
| Here is what is really happening... | j | Mar 19, 2009, 12:58 pm |
| Here is what is really happening... | Bill | Mar 19, 2009, 11:41 am |
| price cutting | Cal MGA | Mar 18, 2009, 5:39 pm |
| RE: Regulators | The Truth | Mar 18, 2009, 4:07 pm |
| Riiiiiiiiiiight...... | HaHaHaHaHaHaHa | Mar 18, 2009, 4:05 pm |
| RE: The Kettle Is Right | Gill Fin | Mar 18, 2009, 3:20 pm |
| RE: (Pointing Finger) | Barry Bonds | Mar 18, 2009, 1:57 pm |
| (Pointing Finger) | R. Palmero | Mar 18, 2009, 1:30 pm |
| It's absolutley happening | CTC | Mar 18, 2009, 1:23 pm |
| The Kettle Is Right | Edmond Kelly | Mar 18, 2009, 1:04 pm |
| Fantasy | Darwin | Mar 18, 2009, 1:03 pm |
| RE: PriceCutting | nobody important | Mar 18, 2009, 12:55 pm |
| PriceCutting | Henry Vogel | Mar 18, 2009, 12:48 pm |
| Regulators | Slow Mo | Mar 18, 2009, 12:48 pm |
| Hey pot - Kettle here | The Kettle | Mar 18, 2009, 12:46 pm |
| How about addressing ALL the facts next time | Fast Eddie | Mar 18, 2009, 11:44 am |
| Back to article | ||
Subject: Regulators
1. Regulators have a different view on what adequate pricing is, vs. competitors. Regulators tend to think you can make money below loss costs until such time the G Funds take over.
2. Politically, the regulators must say AIG is not underpricing business. Regulators have never recognized carriers that are underpricing in order to gain or retain market share. Look at Kemper, Reliance, California WC companies. Caught them by surprise.
3. I doubt the underwriters at AIG are thinking, "Since they will not allow me to fail, therfore I will price my business too low." Instead, they are rewarded (bonuses and increases) based on volume and not profit. As accounts leave them, they price to try to keep them, rather than to make a profit. They expect to lose their jobs or move on anyway.
4. It is a fact that AIG is underpricing business to their competitors' detriment. Perhaps a guaranty assn will pick up the pieces, perhaps they will get out of the situation some other way, but when the cycle should be going the other way, a desperate company is keeping the market soft.