Brokers need to weather the AIG storm
Local brokers should not panic and shed business placed with AIG Australia as the US parent recovers from the brink of collapse, according to a senior broker.
Steve Lardner, National Insurance Brokers Association (NIBA) Vice President and Aon Retail Services GM, says brokers need to remember that AIG Australia is covered by Australian Prudential Regulation Authority (APRA) rules and should not get wrapped up in what is happening overseas.
“They should be getting the facts and talking to their clients, understand their concerns and needs and explain the options they have,” he told insuranceNEWS.com.au at the NIBA Convention in Darwin today.
“But Australian legislation is far stronger than most countries. In these times we need some calm, some clear thinking and there shouldn’t be panic.”
Last week the US Government gave the world’s largest insurer a $US85 billion loan ($103 billion) to keep it afloat after AIG was downgraded by three major ratings agencies.
Barbara Bradshaw, CEO of Britain’s Institute of Insurance Brokers (IIB), who is also at the NIBA Convention, told insuranceNEWS.com.au the institute is telling British brokers that even though AIG has been dramatically downgraded, its rating is still higher than some of the underwriters brokers are considering as an alternative.
“There was quite a bit of activity with brokers switching (last Tuesday) and then not regretting but perhaps revisiting their decision the next day,” she said.
“It has calmed down quite a lot now but in the long term you have to wonder what will happen. We don’t know what AIG will be selling off.”
Mr Lardner says predicting what will happen with AIG in terms of what business will be sold and what will be kept is like looking into a crystal ball.
“AIG Australia is out there talking to brokers, and clients where required,” he said. “They’ve got to be doing that. The hard part is that it is not the fault of anyone here in Australia.”
Steve Lardner, National Insurance Brokers Association (NIBA) Vice President and Aon Retail Services GM, says brokers need to remember that AIG Australia is covered by Australian Prudential Regulation Authority (APRA) rules and should not get wrapped up in what is happening overseas.
“They should be getting the facts and talking to their clients, understand their concerns and needs and explain the options they have,” he told insuranceNEWS.com.au at the NIBA Convention in Darwin today.
“But Australian legislation is far stronger than most countries. In these times we need some calm, some clear thinking and there shouldn’t be panic.”
Last week the US Government gave the world’s largest insurer a $US85 billion loan ($103 billion) to keep it afloat after AIG was downgraded by three major ratings agencies.
Barbara Bradshaw, CEO of Britain’s Institute of Insurance Brokers (IIB), who is also at the NIBA Convention, told insuranceNEWS.com.au the institute is telling British brokers that even though AIG has been dramatically downgraded, its rating is still higher than some of the underwriters brokers are considering as an alternative.
“There was quite a bit of activity with brokers switching (last Tuesday) and then not regretting but perhaps revisiting their decision the next day,” she said.
“It has calmed down quite a lot now but in the long term you have to wonder what will happen. We don’t know what AIG will be selling off.”
Mr Lardner says predicting what will happen with AIG in terms of what business will be sold and what will be kept is like looking into a crystal ball.
“AIG Australia is out there talking to brokers, and clients where required,” he said. “They’ve got to be doing that. The hard part is that it is not the fault of anyone here in Australia.”