Reply #11: AIG's Sullivan Says Global Property Insurance Rates Are Rising

[UpInArms]

Hey Ozy! You get the "crystal ball" award on this one :D



http://www.bloomberg.com/apps/news?pid=10000103&sid=anpVgh1X_Bmg&refer=us

Sept. 28 (Bloomberg) -- American International Group Inc. Chief Executive Officer Martin Sullivan said insurers, battered by Hurricane Katrina's devastation in the Gulf of Mexico last month, are raising commercial property rates around the world.

``We are already seeing rate increases being proposed in the property, energy -- on and offshore -- and the marine areas,'' Sullivan said yesterday in an interview in New York. ``The increases have not filtered into other lines of business. That's not to say they won't.''

Katrina, estimated to be the most costly disaster in the industry's history, is triggering widespread price increases following more than a year of declines, said Sullivan, who runs the world's largest insurer. Analysts haven't quantified expected rate gains and neither did Sullivan. After a record four hurricanes in Florida last year, property rates rose only in the damaged regions.

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``An event like this provides a catalyst for pricing,'' said Cathy Siefert, an analyst at Standard & Poor's in New York, who has a ``buy'' rating on AIG's stock. ``AIG's Katrina losses are manageable relative to their capital base. They are well positioned to benefit.''

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