National Underwriter - August 15 2011

Insurers Contemplate UK Riot Losses

BY CHAD HEMENWAY

THE ASSOCIATION of British Insur- ers (ABI) says carriers are expecting “significant losses” of more than 100 million pounds ($162 million at current exchange rate) from damages caused by rioting in boroughs of London and other cities.

ABI spokesman Nick Starling says it is “too early for us to have an accurate picture of total costs, especially business-interruption costs,” but insurers are expecting significant home and commercial-insurance claims as youth in the United Kingdom continue to loot businesses and commit arson as they have since Aug. 6.

The Metropolitan Police Service (MPS) says more than 560 arrests have been made as “unprecedented violence” is directed at officers. The MPS says officers have been attacked with bricks, bottles and wood. Some have even been hit by cars.

“But this is not just about my officers
who continue to do their very best,” says
Steve Kavanagh, deputy assistant commis-
sioner of the MPS, in a running online up-
date of the situation. “This is also about the
damage these thugs are doing to our neigh-
borhoods. Local shops and businesses have
been ruined, householders have been left
homeless, and great damage has been done
to our local services and infrastructure.”
ABI says home insurance should cover
fire, looting and damages. Many policies
also provide payments if homeowners can-
not stay in their home.

For NU’s continuing coverage on the bidding
war for Transatlantic Holdings, be sure to
check out www.propertycasualty360.com
Benmosche Says Crisis Is Over
As AIG Posts $1.8B 2Q Income

BY CHAD HEMENWAY

AMERICAN International Group Inc. swung to a profit with second-quar- ter net income of $1.8 billion compared to a net loss of $2.7 billion for the second quarter a year ago.

Robert H. Benmosche, president and CEO
of AIG—the beneficiary of a $182 billion
bailout from the government in order to
avoid collapse in 2008—tells CNBC that AIG
has “turned the corner and our crisis is over.”
Benmosche reiterated the point during a
conference call Aug. 10 to discuss earnings.
“We’re independent of government support.
Overall, we’re in great shape.”
Benmosche adds in a statement: “Our
continued improving operating results
should provide a catalyst for the U.S. Treasury
to sell its shares at a profit for the taxpayers.”
The Treasury still holds a majority stake
(about 77 percent) in the company after
an $8.7 billion common stock offering—
a “significant recapitalization milestone,”
says the CEO in his statement—consisting
of 100 million AIG shares and 200 million
shares from the U.S. Treasury.