I wanted to take a moment to update you on the current situation with
AIG, its potential impact, and our response.
We have been following the AIG results and restructuring for the
past several quarters. Equity Risk Partners meets on a regular basis
with AIG leadership at the local, regional, and corporate level. In
some cases, we have relationships at AIG that go back decades. We are
acutely aware of the situation and are monitoring every development
very closely. I will be meeting personally with AIG management
tomorrow for an individual briefing on the situation.
Here is what we know:
- Your insurance policy(s) is through a statutory insurance
company of AIG Commercial Insurance and/or AIG Private Client
Group. These are subsidiaries of AIG, Inc.
- The issues making the headlines reside in other subsidiaries of
AIG, Inc; most notably, AIG Investments.
- AIG Commercial Insurance has statutory surplus in excess of
$26.0 billion. This surplus is regulated by the various state
insurance departments and is available for policyholders. This
surplus cannot be used by AIG, Inc. to satisfy liquidity issues at
the parent company level.
- In the extremely unlikely event that AIG
Commercial Insurance would be unable to pay claims, policyholders
with policies written through an admitted AIG Commercial Insurance
subsidiary insurer receive additional protection through the
guaranty fund in their respective state. This is in addition to
AIG Commercial Insurance's statutory surplus.
- AIG Commercial Insurance / AIG Private Client Group are the
cornerstone businesses of AIG, Inc. As AIG looks to raise capital
to meet its liquidity needs, it is very likely that AIG will shed
non-core assets and return to focusing on its primary insurance
business.
Here is what we are going to do:
- We will continue to monitor all developments in real time. Every
Equity Risk Partners professional is plugged in to this issue and
its impact on our clients and partners.
- Every one of your policies will be reviewed by an Equity Risk
Partners professional to determine an appropriate alternative to
AIG if,
- There is further deterioration to the AIG Commercial
Insurance balance sheet
- AIG develops a response to the current situation that is
unpalatable to you
- You are uncomfortable with the "cost" of doing
business with AIG going forward
- At a minimum, we will begin your renewal process earlier than
usual to allow us to seek out alternatives on your behalf and to
give you time to reasonably assess the options and to make an
informed decision.
This is a very unique time and we are facing an unprecedented
series of events in the financial markets and the global economy. We
are here for you - to answer questions, to examine alternatives, or
just to talk.
Please feel free to contact me directly or any one of my Equity
Risk Partners colleagues. We appreciate your time and your continued
support of Equity Risk Partners.
Very truly yours,
Michael C. Marcon
CEO
T H E P A R T N E R S ' P E R S
P E C T I V E
