American International Group Inc. has repositioned its accounting for financial items over the past four years, which has significantly reduced exposure to risks of class action in securities, the insurance company's executives said on Friday.
Describes the changes in AIG's third quarter In an interview with analysts, executives noted that AIG, which has long been a leader in the liability insurance for executives and salaried employees, has also significantly reduced its primary limits. which historically accounts for 60% to 70% of the public company's D&O losses, in recent years, said Mark Lyons, AIG's CFO.
"In 2017, AIG provided D&O coverage to 67 insured persons involved in SCAs , which represented 42% of all US Federal Securities Group targets that year, while in 2020 it dropped to just 1
Prior to the implementation of its turnaround strategy, which began in 2017, AIG was overweight in technology companies, life science companies and healthcare companies, he said.
After reviewing all of its real estate / accident operations, AIG the total limits it offers are $ 650 billion, and $ 65 billion of that relates to financial items, much of the reduction coming from primary D&O, McElroy said.
Large corporations, which used to have $ 25 million in primary limits, offered now $ 10 million in limits, he said. "81 percent of our portfolio is $ 10 million compared to what it would have been $ 25 million four years ago."
In addition, medium-sized listed companies are now offered $ 5 million in limits, compared to $ 10 million or $ 15 million , in Mr. McElroy.
"We believe that this portfolio today is a very different portfolio from a risk selection point of view, from a balance sheet perspective in terms of surplus and side A towards primarily, versus the limits, versus our control of the unit," he said.  AIG has also significantly dampened its non-profit D&O book in North America, with a policy retention of only 15% between 2018 and 2021, with a cumulative interest rate increase over the period of almost 130%, Mr. Lyons said.
"This determined Changing risk selection criteria, away from billion-dollar revenues, large private companies and non-profit universities and hospitals to instead a more balanced average market book, will also drive profitability significantly. "he said.