The AIG bailout has shaken up Wall St. and significantly deflated financial confidence, but it will probably not have a large impact on trucking insurance, at least not in the near term, analysts said.
“My take is it won’t have any impact on the marketplace,” Alan Shetzer, senior vp, national transportation division, Venbrook Insurance Services, told FleetOwner. “In fact, it might even lead to more competitive rates.”
Shetzer said that there was initial concern over the financial stability of AIG. However, as soon as the government came to the rescue, signs began to point to little or no impact on customers, he said, adding that most will likely stay with AIG.
AIG named Edward M. Liddy chairman & CEO on Thursday, succeeding Robert B. Willumstad. Liddy comes to AIG from the private equity firm of Clayton, Dubilier & Rice. He previously was chairman & CEO of The Allstate Corp. from 1999 until 2006 and president & COO from 1994 to 1998.
According to Reuters, Liddy said AIG should have a list of assets it wants to sell within the next seven to 10 days and possibly beginning to sell during that time period.
Liddy added that after the assets are sold, AIG would become a smaller firm focused on its traditional strengths in property-casualty insurance and international business.
“Long term, various units of AIG will be spun off or sold off and the beat will go on,” Shetzer said. He added that the insurance company is still in business and the only potential impact will be that other companies will see an opportunity to grab an increased market share, leading to possibly lower prices for consumers as companies fight for customers.
However, Jeffrey Benzin, assistant vp of underwriting for Global Corporate Casualty, told FleetOwner that he agreed the bailout may not have much of an effect anytime soon. “I don’t see an immediate change from a marketplace perspective,” he said.
Yet Benzin speculated that there could be a long-term effect, as there may be movement away from AIG trucking in the future. He said that the first fleets to be effected would be those that are the least appealing to lenders, as AIG would sometimes insure fleets smaller companies wouldn’t touch. The most attractive fleets, he said, will most likely still have the same opportunities they did previously, and have no need to panic.