Tuesday, December 16, 2008

Told Ya So!

Regular readers may recall that we expressed grave doubts regarding marketplace activities by erstwhile insurance giant AIG. Specifically, now that you and I are their reinsurer, we were concerned that this created an uneven playing field, and that AIG would be tempted to play fast and loose with their conduct.
That didn't take long.
According to Financial Services Online (a service to which I subscribe):
"IRRESPONSIBLE AND UNFAIR? - Reports are surfacing that AIG, the recipient of a $150 billion taxpayer-funded bailout, is aggressively cutting its insurance rates in an attempt to win new business and boost market share. If underwriting losses become a problem, the U.S. government may have to provide more financial support. According to Liberty Mutual chief executive Edmund Kelly, "I think it's fair to say they're doing some very stupid things in the market. If (AIG units) are not reined in, it could be very destabilizing for the market."
Quelle surprise.
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