This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AIG Competition Can't Take Advantage

Stocks in this article: AIG MET HIG

AIG's weaker position has also placed its credit ratings at risk. Though Moody's, Fitch and S&P affirmed most ratings earlier this month, following AIG's loss and restructuring announcements, they also provided an uncertain outlook for the firm, given its escalating losses, massive restructuring plan and expanded government ownership.

Such an outlook could create big opportunities for competitors to capture business. For instance, some mid- and large-size companies can only buy workers-compensation insurance from "A"-rated carriers -- meaning they must be confident that investment-grade ratings are safe. A recent report from Bank of America equity research highlighted ACE and Chubb as beneficiaries from woes at AIG. Analyst Jay Cohen noted that "a significant number" of ACE's senior executives once worked at AIG and understand its model well enough to "know which businesses to target."

But AIG is aware of the danger and has only redoubled efforts to retain clients. The firm has been touting strength in core areas like property, casualty, life and workers-compensation insurance as uncertainty surrounding its future has shaken existing customers and scared off new business. It is unclear whether AIG is purposefully pushing down prices to retain and expand its customer base, but such a tactic could hurt dozens of competing firms like Allianz (AZ), AXA (AXA), MetLife (MET), Travelers (TRV), Prudential (PRU), Chubb (CB), Hartford Financial Services (HIG), ACE (ACE), Aflac (AFL) and Conseco (CNO).

AIG's earnings report on March 2 provided some evidence of trouble across several core businesses, though it's unclear whether they stem from pricing or customer flight.

2 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs