The day Hurricane Andrew rolled ashore, a top insurance company executive said the natural disaster should be used as an "opportunity" to raise rates, an internal memo shows.
State and national insurance regulators Saturday called for an investigation of the memo, written by an executive of American International Group, one of the nation's biggest business insurers.AIG's chairman, Maurice R. Greenberg, has lobbied actively for higher rates, which have been flat in recent years. But there is disagreement over whether the estimated $7.3 billion in insurance payouts from Hurricane Andrew justify rate hikes nationwide.
The AIG memo was written Aug. 24 by J.W. Greenberg, an executive vice president and the chairman's son, and distributed to company presidents and vice presidents.
"The industry cannot absorb the loss and the cash hit without increasing rates," the memo said. "This is an opportunity to get price increases now. We must be the first, and it begins by establishing the psychology with our own people. Please get it moving today."