This press release caught my eye:
The AIG Companies have formed AIG Specialty Excess, an umbrella and excess casualty underwriting unit that will concentrate on insuring specialty and difficult-to-place classes of business including construction, transportation, public entities and educational institutions.
Effective May 15, 2006, AIG Specialty Excess will respond to all in-force business, as well as new and renewal business currently handled by the C.V. Starr & Co. agency, a subsidiary of C.V.Starr & Co., Inc.
The press release is lacking on a few details. Starr is the current outpost of former AIG CEO Hank Greenberg, which is why AIG wants to sever ties. What’s not clear to me is whether Starr is a brokerage, or if they have actual underwriters on staff.
If AIG’s starting a new underwriting shop to replace Starr — that’s a battle that has a pretty good chance of ending badly. While I’m not intimately familiar with the lines involved, my own specialty excess experience has been that business follows the underwriter, not the paper…and that these sorts of underwriters don’t just grow on trees. Small mistakes in the excess arena can quickly become mighty expensive.