Insurance News

C.V. Starr Statement About Departures of A.I.G. Employees

Posted on: November 3, 2009

NEW YORK, Oct. 27 /PRNewswire/ — There have been a number of recent reports about an exodus of employees from A.I.G., and the role of C.V. Starr & Co., Inc. Over the last year, we understand that a number of AIG’s 100,000 employees have left A.I.G. to join the company’s direct competitors in the global property and casualty and life insurance businesses. Only thirteen of those employees have joined C.V. Starr & Co., Inc., which was formed in 1950 and focuses on highly specialized insurance lines; far more, we believe, have joined other, larger companies.

The reason that employees are leaving A.I.G. has less to do with these other companies, and more to do with the current approach to A.I.G., which is unlikely to result in the repayment of the American taxpayer.

Shortly after AIG first received federal assistance in September 2008, the then-Treasury Secretary went on “Meet the Press” to announce the Bush Administration’s intention to “liquidate” A.I.G. A successful liquidation, however, has proven impossible in the present economic climate, since buyers for AIG assets at fair values simply do not exist at this time. Fire-sale prices are bringing taxpayers, who now own almost eighty percent of AIG, only pennies on the dollar for their investment in AIG.

Moreover, the failed approach ignored the key value driver of AIG: Its people. Since the day the Treasury Department announced its plan to liquidate AIG, value has been destroyed because AIG’s people and their relationships — AIG’s business — are heading for the exits. The evidence is overwhelming and indisputable that the American taxpayer is an investor in a steadily diminishing asset as a result of this failed approach.

Rather than pursuing the liquidation approach, which is destined to result (in the long-term) in shortfalls to the U.S. Treasury and (in the nearer-term) to the accelerated exodus of employees from AIG, AIG should be allowed earn the money necessary to repay the American taxpayer. Mr. Greenberg has proposed to the U.S. Congress a plan to retain employees and assure repayment of A.I.G.’s federal assistance. (For additional details, see the Testimony of Maurice R. “Hank” Greenberg before the House Committee on Oversight and Government Reform, April 2, 2009.)

Source: C.V. Starr & Co., Inc.

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