I mean not that we learned anything from last time, nor did any radical changes happen in the business model. Not that I would like for that to happen, but when you coin in the inflation that is happening and the possible recession that could come, I don’t see this scenario to be impossible at all.
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I work in GI. My department is as follows. We are running well over 100% combined ratio so we are losing money every quarter. We are non-renewing thousands of policies and alienating our best brokers. We have new systems that are supposed to "Revolutionize" how we do business, but they barely work and when they do there are multiple work arounds just to keep them going. We have lost most of our talent and any talent left is looking for another job. No one who leaves is replaced. Moral is lower than I have ever seen it at the field level. No one that I know is happy about the raise they received. In general, people are just going through the motions and don't really care anymore. It feels like working at the DMV or any other government office. Execs are out of touch and employees know they might be rif'ed, but it is unlikely their boss will ever be able to fire them so they just do the bare minimum. Not that you can blame them.
In short, it is a disaster when you compare today's working environment with what it was maybe 5 years ago. Maybe other departments are different, but it sure seems like a lot of people feel the exact same way. Of course execs will cheerlead, I would too if I were making seven figures a year and giving myself 200% sti bonuses, but for most people you are expected to make ends meet on a 2% or less raise. Very motivating. I'll do the bare minimum too and keep sending resumes.
Because of the above, our direct competition is simply wiping the floor with us and everyone in the industry knows. Maybe PZ can prop up the quarterly reports by cutting expenses and selling units, but that's not a long term solution in my opinion, but I really don't believe anyone cares about a long term solution. It's about getting paid and getting out.
For the person that said GI is a disaster, can you explain? I’m not saying it’s not but I do want to understand why it’s a disaster. Is there something in the Annual Report or other info you can point to? Or, just explain to regular shmoe what about the GI business is a disaster. For instance, on calls w/ AIGRM, you’d think that everyday they’re hitting grand slams.
Removing the SIFI designation was an important step in looting AIG. It is why Carl Icahn wanted it gone. When government regulators stop watching and requiring financial stability you can get away with a lot more. The SIFI was removed with an agreement that the L/R piece would be spun off to protect the aforementioned stakeholders (politicians and government employees).
Now that L/R is almost removed from AIG's books and the accounts are financially secure, it allows executive management to do as they please with GI. As we know, GI is a disaster, but it is a big, billion-dollar disaster with assets. If we can't fix GI we can just sell assets piece by piece.
When the SIFI was removed the clock started. When L/R spun off the clock started to move faster. From here on out you will see a gradual winding down of what was formally known as AIG. If your unit can be polished it will be sold. If not, they will be run off. If any positioned can be outsourced, they will be outsourced. Execs will collect millions and millions of dollar to run AIG into the ground. How long will this take? Your guess is as good as mine, but I guarantee you will not see AIG 200, nor will your children nor their children.
Nope, PIrate Pete and Crew will loot the company, then just sell whatever is left and get massive payouts along the way.
You can then go get a $15 an hour job somewhere
Reply to Post ID: @rpu+1gHjrmBI
Very well put. I was there at the time.
The major reason AIG was bailed out last time is because in 2008 AIG L&R handled a good portion of the retirement funds for politicians and government employees. The average citizen was an afterthought. AIG was too big to fail because that failure would have hit both political parties in their private accounts.
In comes Blackrock to solve that problem. After L&R separates and GI fails, no one is coming to save AIG. It will simply be another story of a fallen giant. It will forever sit next to Enron in the annals of corrupt companies that ended badly.