AIG will rejig offer in high-net-worth property as climate change aggregates excess risks: CEO

AIG will rework its high-net-worth property segment as climate change has burdened the segment with "significant issues", chief executive officer Peter Zaffino (pictured) announced.

High net wealth property is overly concentrated in peak risk zones to render major aggregation issues for the industry, AIG now believes.

"By the nature of the business, it is exposed to peak zones and susceptible to increased frequency and severity" for both primary and secondary risks, the CEO said. With loss costs running amok, the segment shows "significant issues that need to be addressed."

"The business model simply needs to change," Zaffino said.

As part of the strategy shift, AIG will push high net worth property insurance into its excess and surplus lines on a non-admitted basis and kill off homeowners’ coverage on an admitted basis, Zaffino suggested.  AIG has already resigned from admitted homeowners in California, he noted.

Moving outside the home-state regulatory framework for homeowner’s policies will allow AIG to tighten wordings, better monitor aggregation and reduce volatility, the CEO suggested in his comments.

Climate change is taking the blame and Zaffino launched his strategy announcement with a long list of headline stats on climate patterns.

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