The highest calling of mankind i thought of as private equity. And then i started interviewing. I know how to do. Ive learned in doing my interviews how leaders make it to the top. I asked him how much he wanted, i said 250. I didnt negotiation, and no due diligence. How they stay there, you dont feel inadequate because only the second wealthiest man in the world; is that right . For many years the most successful Insurance Company in the world was aig and then the Great Recession came and aig required a 183 billion bailout. Talk about the new aig. So for those who werent familiar with property and casual insurers what do they do . We ensure businesses, small medium large commercial businesses for their property insurance or auto or Financial Lines which is directors and officers and we also have a business that does hopefully getting a good rate of return. So lets talk about the first part. In the first part of assessing risks is it harder today because inflags is so high to assess the risks that you might have in insurance somebodys home or property . The company is much more complicated to getting the jund writing rights. With inflation, the complexity of cyber risk today, and other factors, such as global warming, kas at as if is, the dynamic of what happened after the pandemic with density and peak zone areas such as florida, california, so understanding your Balance Sheet and your aggregates with what your underwriting is complicated. You need people with a lot of experience and judgment in making underwriting choices. Five out of the last six years weve had over 100 billion of Natural Disaster losts, thats never happened before. What about Artificial Intelligence . Going to enable you and others to say we have enough information to say what something is going to be worth in terms of insuring it or not . Finding our way into the business. The first piece is getting much better into data which allows us to make better decisions. Its also a great opportunity to Service Business better in terms of call centers and different ways of using robotics and other ai will be helpful but it is an emerging practice within the industry and one that is evolving very quickly so its also going to present risks that other companies how they use it and how they use large language models. So its complicated but benefitting the industry. Say somebody has a claim their house burn down and the adjuster comes down and says it wasnt worth or the damage wasnt as great. Is that an unfair image . I think its an unfair image. I think it probably was true years ago but today the contracts are much more clear, paying claims, thats what we do. We underwrite risks but when we have to show up in moments that matters in terms of how we pay the claims and amount of disputes are small percentage of our portfolio and i dont think thats a fair assessment. So when you make an adjustment that youre going to charge a certain premium you think youll make some profit on the premium and generally are you doing that now . Yes. Thats not been aigs past from 2009 to 2019 it lost over 30 billion in underwriting, and so coming in i arrived in 2017 b with a great team that followed me here and we began that underwriting journey. So now we do make profits. So for every dollar we underwrite risk we make around 10 to 12 cents of profit. Lets talk about the investment income. You bring in these premiums and all insurers invest and people do invest i assume for you. So what kind of return are you looking for on your investment portfolio . 75 tends to be fixed income. Then the remaining portion will be in some form of alternative investments such as private equity or commercial real estate and thats done very conservatively. But we really are not going to win on just the investment income. You really need to make a profit. So we balance both very well. So i should say private equity my own firm does have a relationship with aig. So of course you cant put too much money in private equity, in that area, right . Absolutely. They do a great job. Generally are all insurers now basically making money both on investment return and on premium underwriting . Is that basically the core . I think the industry is making profit on underwriting and the investment side as well. Its often said that lloyds of london which would insure almost anything. Is there things you wont insure if somebody says im worried about my wedding being rained out. Is there any kind of insurance that you wont provide . We are very specific. It has to be where we have skill, where we can deploy capital and get a fair return. So we dont really reflect the way lloyds can insure almost anything. Its much more a traditional Specialty Company that would have real strong expertise and scale in the areas that we underwrite. So Housing Insurance is a big part. What is the biggest risk in providing insurance to peoples homes . The complexity has been the density built up in areas that have significant exposure. Think about the southeast of the United States for wind, or wildfire in california. What happened as an effect of the pandemic is that people are moving into those areas and ill make it up. 2. 5 million house cost 5 million so you have this density in areas that were already challenged to have enough insurance to be able to respond to the individual home owners. So its become more complex, add in more frequency of hurricanes and wildfire and you just have a market that is under a little by the of stress. Property and casual thats separate than automobile insurance. Auto would go into you do Auto Insurance . Yes. Is that a Risky Business . Are drivers Getting Better or what about people that supposedly dont have cars that dont have drivers . Are you worried about that . I am worried. Driverless vehicles are a big exposure. But i think that with ai quality of vehicles, its more predictable than perhaps it was in the past. So for your own home, who provides Home Insurance for you . Aig. And if you have a claim do you have any problem getting it paid . I havent had a claim. Lets talk about how you got into the Insurance Business. So your father was in the business, did he say when you grow up you should go in the Insurance Business . No he didnt. The myth of him reading me insurance and reinsurance books at night is not true. He always encouraged me to pursue what i wanted and i went to Boston College graduated and the reason why i want to enter the Insurance Industry is i wanted to stay in boston and a Company Called the hartford did offer me a job if i would do training elsewhere to come back to boston and so that was the reason i took the job. Some people might say that insurance is a boring business, it doesnt attract people the way private equity does. Is that not the case or you found it to be interesting . I find it very interesting. Youre not doing the same thing. Youre learning to build relationships, understand the quantitative nature of how to underwrite and also the qualitative nature. So i liked it because it had a balance of doing Different Things at once. What did you do after your first job in boston . Ironically i never made it back to boston. I stayed in new york and early on in my career i didnt think i could really work in new york city which has been the predominant portion of my career. So ive always been in big companies, worked at itt, General Electric and marsh mcclenen after that. So you were working on september 11th of 2001. And where were you on that morning . That morning so it was my sixth day of work at marsh mcclenen and i was on the 53rd floor of tower two that they. So what happened . The first plane went into tower one and i had seen it. So colleagues and i started to evacuate. Nothing urgent but into the stair well to make our way down and made it to about the 40th floor when the second plane went into the building which i didnt know what it was at the time. I figured either tower one had tipped over or Something Else had come into the building and we had a sense of urgency of getting out. Was this a mass rush . It was orderly but it started to get panicky of trying to get out. So you got out of the building. How much before the building collapsed . I was probably 20 minutes north of the building when it collapsed so i was never in danger of having soot or other things on me once the building collapsed. But as soon as you got out and ran somewhere . Met a friend and we happened to, we walked north to 125th street over the course of the day to get out of the city. And how many of your colleagues died . Almost 300 that day. 300 colleagues died. Yes. So you gnt out and say ive had enough, im going into Something Else . The unique part about our business is that in major disasters or things that happened like that, our clients need us and so it was immediately calibrating focusing on helping. I was in the reInsurance Business so helping Insurance Companies get back into business and raise capital and helping them assess what they needed to do going forward. So today, aig over the years has been a gigantic company, one of the largest, maybe the largest at one time insurers in the world. But then during the Great Recession it had some problems and ultimately the got had to come in with a bailout, 180 billion guaranteed loan or bailout. Have you paid that back yet. Yes, thats been paid back well before i arrived at the company. Did the government make a profit . Yes, there was interest and profit. So what caused that was basically too much insurance on i guess it was high risk mortgages . It was a Financial Products product that had credit on liquidity. Liquidity. When you ok or my name is teresa barber. I was in the United States navy and i served overseas in the middle east and africa. Early on in my career i had a commander that taught our Suicide Prevention training on a friday afternoon and the very next day, he took his own life. 90 percent of suicide attempts involving a gun are fatal. You dont know how much somebody can hide whats going on in their head. Store your guns securely. Help stop suicide