AIG Global Surety, a division of the property and casualty insurance subsidiaries of American International Group, Inc., and National Indemnity Company (NICO), a member of the Berkshire Hathaway group of insurance companies, announced that they have joined together “to provide a surety facility that offers up to $600 million in aggregate bonding to large creditworthy contractors.”
The coverage offered “will provide up to $200 million per bond, not to exceed $600 million in bonded aggregate liability, to qualified contractors with a net worth of at least $25 million. AIG Global Surety will provide accounting, claims, credit, engineering, legal, management and underwriting expertise, while NICO will participate in the facility as a 50 percent quota share reinsurer,” said the joint announcement.
AIG Global Surety President Louis Iglesias indicated, “This new surety facility is provided by highly rated insurance companies, and comes at precisely the right time for a market needing financial security. The combination of the industry’s poor underwriting and pricing at rates far below those applied to similar credit transactions has caused the evaporation of quality surety. This facility offers solid surety capacity at rates and under terms that realistically reflect the business and credit risks. We are pleased to work with National Indemnity to institute this much needed facility.”
Topics AIG Contractors
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