Many argue that premiums don't tell you the whole story.
For instance, there has been surprising strength in the personal line business - despite fewer homes, new cars and new businesses to insure, says one analyst that collects pricing data from major P&C insurers. On the commercial side, there's been less demand with pickier clientele.
"You can't delink the pricing and unit pieces that make up the premium," the analyst said, who declined to be identified in order to protect client relationships. "Right now, it's a soft market for commercial property-casualty lines. It's been an OK market for personal lines and it's been moving around on the annuities and life insurance side."
Similarly, the GAO said it faced "a number of challenges" in analyzing data on P&C premiums. Among those were "the unique, negotiated nature" of some policies, "subjective assumptions" in determining prices and the fact that losses may not occur for years, making it hard to determine whether premiums were "adequate."Nonetheless, sources in the insurance industry are still calling foul. Thomas Adams, a lawyer who consults with financial-services firms, says insurance clients haven't stopped complaining about AIG's pricing schemes. "I've come in contact some people with deep knowledge of AIG's current business and structures," says Adams. "Regarding the pricing, these folks made a compelling argument that, thanks to an effective subsidy from the Fed, AIG is able to undercut their competitors to get more business. I don't know if the Fed and Treasury are complicit in this or not, but perhaps the hope is that if AIG can get more business it can grow its way out of its problems." When such criticism was lodged against the insurance giant in the dark days of 2008 and 2009, it carried more weight. But in interviews with TheStreet this and last week, consultants, data analysts or financial advisers have indicated that AIG isn't being devious, it's just being competitive. "From what I've seen on AIG, they're very, very aggressive and I think there are reasons for that," says Dan Weedin, who advises clients on insurance providers at Toro Consulting. "No. 1, they took such a hit a couple years ago. They lost business; they lost people who were working for them; they went through the whole rebranding - with 'Chartis' and all that. Now they've got to bring in business; they've got to replace what they lost."
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