November 2008 Issue
Insurance Meltdown, Too? Not Exactly
With the financial tanking of AIG—a major aviation insurer—should owners flee to other companies? For now, the answer is no. AIG appears solvent, but not untouched.
The depressing drone of bad economic news yielded one little nugget that especially caught the attention of many owners last month: AIG, the insurance giant, was overleveraged and on the ropes. Deemed too big to allow to fail, the federal government engineered a hasty bailout package that has since ballooned in cost. What does this have to do with the AIG policy on your Skyhawk? Or your USAIG policy on your Bonanza? Is the insurance business about to tank along with the stock market? Not exactly, but that’s not the same as saying AIG’s well-regarded aviation insurance division hasn’t been nicked by the credit crisis. It has, but only as a result of a general loss of confidence in certain businesses in general. For a detailed report on this, click on the podcast link at right, which appears on our sister publication, www.avweb.com. In that audio segment—no MP3 player required, by the way—you can hear an explanation from our aviation insurance guru, Jon Doolittle.
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