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Insurance Evaluation Insurance Evaluation: AIG, Travelers, Saint Paul, and Hartford Ricki Gageby Capella BUS4077 December 12, 2023 1

Insurance Evaluation AIG (American International Group): AIG is one of the largest insurance companies globally, offering a wide range of insurance products and services. They have a strong financial standing and long-standing experience in the industry. AIG's working relationships include partnerships with various businesses, corporations, and individuals worldwide. They provide risk management solutions for property, casualty, life, and financial services. AIG's underwriting and investment operations may face several specific risks. In underwriting, some risks include adverse claims leading to higher payout obligations, underpricing of policies, and exposure to catastrophic events. In terms of investments, AIG may face risks related to market volatility, interest rate fluctuations, credit default, and liquidity constraints. It is important for AIG to effectively manage these risks to ensure its financial stability and long-term success. A Additionally, AIG has had some past financial challenges, including a bailout during the 2008 financial crisis. However, the company has taken steps to strengthen its risk management practices and improve its financial stability over recent years. AIG has a solid financial strength rating of A from A.M. Best, a credit rating agency that gives insurance companies financial strength ratings. - Risks: AIG operates in a wide range of insurance sectors, including property and casualty, life, and retirement. Therefore, it faces various risks associated with underwriting, investment, and regulatory compliance. - Risk management benefits: AIG has a strong risk management framework in place to identify, assess, and mitigate risks. They offer extensive underwriting expertise, advanced risk modeling, and global reach to provide tailor-made risk management solutions to businesses. - Financial standing: AIG has a solid financial standing and is considered one of the largest insurance companies globally. Their balance sheet and capital reserves indicate their ability to handle potential losses. Travelers: Travelers is another well-established insurance company known for its property and casualty insurance offerings. They have a solid financial condition and are highly regarded for their claim-handling expertise. Travelers actively work to build strong relationships with their customers, agents, and brokers to ensure effective risk management. They focus on managing risks associated with property damage, liability, and other potential losses. Travelers is another reputable insurance company with a solid financial condition. It offers a variety of insurance solutions, including property, casualty, and specialty insurance. They offer comprehensive risk assessment services to help businesses identify potential risks and develop strategies to mitigate them. Travelers has a strong focus on risk management and provides valuable risk assessment and mitigation advice to its clients. Its working relationships are known for being reliable and efficient. Travelers has developed industry-specific risk control solutions, leveraging data analytics and technology to provide actionable insights for risk reduction. While it has a solid financial position, it faces risks similar to other insurers. These risks include underwriting risks, investment risks, and market risks. It also faces risks specific to its property and casualty insurance business, such as claims arising from natural disasters or catastrophes. Overall, Travelers has built a strong reputation for managing risks effectively. They also have a 2

Insurance Evaluation dedicated Risk Control Academy, which offers training and resources to help businesses improve their risk management practices. AM best has rated travelers “a ++ (Superior)”. Risks: Travelers primarily operate in the property and casualty insurance sector, exposing them to risks related to natural disasters, liability claims, and economic downturn. - Risk management benefits: Travelers offers comprehensive risk control services to help businesses manage and prevent losses. They have a team of risk control professionals who conduct on-site inspections and provide customized risk management strategies. - Financial standing: Travelers is known for its strong financial position. They have consistently exhibited stable earnings, a robust capital base, and a prudent approach to risk management. Saint Paul (now part of Travelers): Saint Paul was a leading insurance company before merging with Travelers. While Saint Paul no longer operates independently, its legacy continues through Travelers. Since the merger, Travelers has expanded its coverage and risk management capabilities. Saint Paul, also known as St. Paul Insurance, is a subsidiary of Travelers and specializes in commercial insurance coverage and casualty insurance. As a part of Travelers, it shares some of the same risks, including underwriting, investment, and market risks. Additionally, being involved in the commercial insurance sector, it may face specific risks related to the economic conditions and industries it serves. They provide risk management solutions tailored to specific industries, including construction, healthcare, manufacturing, and more. Saint Paul has a strong focus on loss prevention and offers risk control services, such as safety consultations, training programs, and risk assessments. AM best has rated them “ A++ (Superior)”. - Risks: St. Paul, like Travelers, focused on property and casualty insurance and faced similar risks related to claims and economic factors. - Risk management benefits: As part of Travelers, St. Paul would have access to the same risk management benefits offered by Travelers, including comprehensive risk control services. - Financial standing: Since St. Paul is now part of Travelers, its financial standing can be assessed based on Travelers' strong reputation and financial stability. Hartford Financial Services Group: The Hartford is a reputable insurance company specializing in property and casualty insurance, group benefits, and mutual funds. They have a stable financial position and offer a broad range of insurance products to individuals, businesses, and institutions. The Hartford maintains working relationships with various businesses, agents, and brokers . Similar to other insurers, it faces underwriting risks, investment risks, and market risks. Being exposed to property and casualty insurance, it may also face weather-related risks, such as claims arising from hurricanes, floods, or other natural disasters. However, the company 3

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Insurance Evaluation has demonstrated resilience and effective risk management practices throughout its history. - They have a dedicated Risk Engineering department that provides risk assessment and loss control services to businesses. Hartford emphasizes proactive risk management strategies, focusing on loss prevention and mitigation. AM best rated them a “a-” (Excellent)”. - Risks: The Hartford operates in various insurance sectors, including property and casualty, group benefits, and mutual funds. This exposes them to risks associated with claims, investment fluctuations, and regulatory changes. - Risk management benefits: The Hartford provides risk engineering services, loss control programs, and proactive claims management to help businesses effectively manage risks and reduce losses. - Financial standing: The Hartford is known for its solid financial position and stability. They have a strong capital position and a track record of consistent performance. Regarding the risks associated with each company, it is essential to consider factors like their exposure to catastrophic events, financial stability, regulatory compliance, claims handling efficiency, and market conditions. These risks can vary over time and require continuous monitoring. In terms of risk management benefits, all four companies offer a range of risk mitigation strategies and insurance products tailored to meet the needs of their clients. They provide comprehensive risk assessments, loss prevention measures, claims management, and support during incidents or crises. I think the choice for which insurance company is best and which I would choose is subjective. It depends on my needs and how each is addressed. I would personally scale out all these companies because they all want your business and see which one is more tailored to my expectations. I would probably go more with the traveler's insurance because it has a better financial rating among AM best and reviews. References About AIG | AIG Insurance . (n.d.). Aig. https://www.aig.com/home/about About travelers | Travelers insurance . (n.d.). https://www.travelers.com/about-travelers About us | Learn about the Hartford . (n.d.). The Hartford. https://www.thehartford.com/about-us 4

Insurance Evaluation AM Best Affirms Credit Ratings of The Travelers Companies, Inc. and Most Subsidiaries . (2023, July 20). https://news.ambest.com/PR/PressContent.aspx?refnum=33582&altsrc=2 A.M. best assigns ratings to newly formed pool -- St. Paul travelers insurance companies . (2005, July 13). https://news.ambest.com/PR/PressContent.aspx? altsrc=3&RefNum=9639&URatingId=-1 Martin, A. (2023, November 30). AIG Life Insurance Review . MarketWatch. https://www.marketwatch.com/guides/insurance-services/aig-life-insurance-review/ #:~:text=AIG%20has%20a%20solid%20financial,insurance%20companies%20financial %20strength%20ratings . 5

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