According to a report in London’s Financial Times, American International Group, plans to announce the formation of an underwriting syndicate at Lloyd’s with an initial capitalization of $100 million ($140 million) which will begin operations next year.
Although AIG has a desk at Lloyd’s, it has never been involved in an active syndicate. It even reduced its commitment two years ago when its AIG Europe subsidiary discontinued writing ‘high hazard international property coverage.” Two other AIG subsidiaries, Lexington insurance Co. and AIG Re, also closed their Lloyd’s property operations.
The new syndicate, which will be managed by Ascot Underwriting under the direction of Martin Reith, who formerly headed XL’s Brockbank Syndicate Management operation, will specialize in marine, non-marine and reinsurance.
The move adds weight to remarks by AIG Chairman Maurice “Hank” Greenberg that the property/casualty market was finally improving. Last week he told delegates at a conference sponsored by Deutsche Bank Alex. Brown that the end was in sight for the fierce competition for market share which has depressed rates and led in many instances to unprofitable underwriting decisions.
AIG apparently now feels the time is right to enter the Lloyd’s market, which is in the process of modernizing its operations, and has seen a general hardening of premiums over the last 6 months.
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