Weedin says AIG has been aiming big. The insurer has gotten aggressive on acquiring and keeping big, corporate P&C accounts whose pockets run deep. But it's inclined to sidestep small-to-mid-sized P&C players if the price doesn't make sense for the size of the relationship.
Weedin explains that small-to-medium sized firms may only be paying $50,000 a year in premiums, while big corporate accounts can deliver $5 million a year. Several factors go into figuring out the price-to-risk-premium for a particular client - from its claim history to its line of business. But the bigger the company, the more opportunities to build out the relationship. And the bigger the overall revenue figure, the more wiggle room an insurer has to offer a discount or value-added perks.
"You can be pretty creative," says Weedin.
Indeed, in July, Chubb Chief Operating Officer John Degnan said that in some "large property accounts," competitors had stolen business by offering "double and even triple" the traditional limits for flood and earthquake insurance without raising premiums for the added coverage.
If AIG is, indeed, targeting big game with low rates and added perks, it wouldn't be the first time.
Adams, the lawyer, himself came up against AIG's bidding wars himself as a managing director at recently-bankrupted mortgage-bond insurer
as well as
Financial Guaranty Insurance Co.
during the boom years. Even then, Adams says, AIG "always won and always had much lower pricing."
Joseph Padduda, a former AIG executive who is now principal of managed-care consulting firm Health Strategy Associates, has also heard that AIG has been "very aggressive" in trying to get new business in areas that seem attractive. He says it's "reminiscent of the 'old' AIG that was very good at identifying niches and selling into them."
But those moves certainly aren't occurring across the board.
For instance, Adam Sherman, who helps individuals select insurance policies at Firstrust Financial Resources, indicates that insurers - including AIG - have been behaving as one would expect in any competitive landscape. They've been cutting premiums on products with slack demand, such as term life insurance or annuities without a guaranteed return. But the industry has kept rates constant or raised prices on products where demand has remained resilient, such as whole life insurance or annuities with a minimum return-on-investment.
"I've really not seen very much going on with AIG's life portfolio very much this year," says Sherman. "I haven't noticed price wars."