AIG CHIEF SEES ‘LEANER’ BROKERS:

The chairman and chief executive officer if AIG said he thinks the ongoing broker investigations will cost large insurance brokers some of their top people and eventually make brokers leaner and more responsive to customers. Speaking at Lehman Brothers Global Reinsurance Briefing, Maurice Greenberg said that large brokers under scrutiny will survive but will be “leaner and more responsive to the fiduciary relationship” they have with their clients in the future. He suggested the exodus of leading brokers from some of the larger brokerage houses has already begun. Greenberg compared the brokerage industry to the airlines. “There’s the old model and the new model. The old model firms are in bankruptcy or constantly working on how to cut expenses,” Greenberg said. “The new model–the Jet Blues of the world–are leaner, working for less fees and commission and doing quite well.” Greenberg added, “Like it or not, many insureds are unhappy” with some of the practices that New York Attorney General Eliot Spitzer and other officials have uncovered and that to the extent this makes the industry “leaner and more responsive,” the changes that flow are welcome. “I’m not unhappy about that,” he said.

Topics Agencies AIG