The collapse of American International Group (AIG) would not pose a systemic risk to the property/casualty insurance industry in the US, two leading trade organisations have said.
In a joint letter from the American Insurance Association (AIA) and Property Casualty Insurers Association of America (PCI) to the leadership of the financial services congressional committees, the trade groups hit out at claims made by AIG in Congress recently.
The letter, which Reactions obtained a copy of, said: "There is no basis to believe that consumers would suffer any significant or long-term adverse consequences in the event any of AIG's P&C operations exited the marketplace."
The letter stated that comments made by AIG may have created "confusion" and "misperception" and while the collapse of AIG may have systemic consequences in some areas, the property/casualty market would be left in good shape.
In a staunch defence of the industry, the letter, which was signed by David Sampson, president and CEO of PCI and Leigh Pusey, president and CEO of AIA continued: "If AIG's P&C companies ceased operations, there is available capacity, existing competition and institutional readiness within the remaining members in the industry to meet the needs of the insuring public.
"Our message is straightforward - the traditional P&C industry does not today pose a systemic risk like other financial segments. We are competitive, well capitalised and able to respond to policyholder needs, as we have demonstrated in the past, when a competitor of any size leaves the market."