Survey: Commercial Insurance Buyers Stay Loyal to AIG

Commercial insurance buyers are not fleeing Chartis, the reincarnation of American International Group Inc.'s commercial business, at the rate they had threatened to do so six months ago, according to a survey.

Barclays Capital's property/casualty buyers survey found 80% of the companies surveyed buy insurance from Chartis, down from 90% six months ago. But of those clients, 75% said they plan to keep their business with Chartis, up from 41% six months ago.

"Risk managers appear less concerned about Chartis' financial strength, and in some cases, Chartis was able to offer more capacity than competitors," Barclays Capital said in its survey.

Marie Ali, a spokeswoman for Chartis, said the company does not comment on analyst reports.

In March, AIG began to inch away from the iconic AIG brand by renaming its commercial property/casualty operations and high net worth personal lines business as AIU Holdings Inc.

In July, AIU was renamed Chartis, as the company continued to move forward with plans to become independent from the parent AIG, which took a $182.3 billion government bailout to avoid failing.

A.M. Best Co. on Dec. 16 affirmed the Best's Financial Strength Rating of most of AIG's property/casualty and life/health insurance subsidiaries. The ratings of the Chartis U.S. Insurance Group -- which includes the commercial pool led by National Union Fire Insurance Company of Pittsburgh, Pa. and the Lexington Insurance Pool, led by Lexington Insurance Co. -- were affirmed at A (Excellent) with a negative outlook (BestWire, Dec. 16, 2009).

"The negative outlook of all rated entities acknowledges the franchise damage and continuing challenges to the companies' within the AIG enterprise," A.M. Best Co. said.

Shares of AIG (NYSE: AIG) stock were trading at $28.18 a share on the morning of Dec. 17, down 2.66% from the previous close.

(By Meg Green, senior associate editor, BestWeek: [email protected])