YouSaid · the spoken record

Peter Zaffino

lines on the record: 35
first: 2023-11-30
most recent: 2023-11-30
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I think it's very good. The progress that we've made, again, with having so many tremendous people here that had a single purpose of putting AIG back to being an industry leader, that we've strengthened sort of every component of the company, the balance sheet, underwriting capabilities, our investment portfolio is much simpler. The company's simpler. Operations are streamlined. So I think we've really made enormous progress and feel like we have a lot to do still.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, all of the what's happening geopolitically, we've just come out of a pandemic. I mean, the complexities across the world and the fragility of what might happen in the future is what I worry about the most because there's things, if you told me five years ago, you're going to come in, be the CEO, you're going to deal with a global pandemic, two wars, potential political tension across the world and also dealing with financial challenges. That's a lot. And so making sure that we focus and deliver on what we can do as an insurance company and adapt to all the changes that are going on around us.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Big companies in China, very big companies in Japan market, and there's very big companies market cap wise in Europe. And so I think that those are the four areas, including the United States, that have very large market cap, multinational insurance companies.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I always think depending on how sophisticated the individual is looking at companies, always the strength of the balance sheet, the consistency of performance is really important because if you end up getting a lot of surprises from catastrophes or other variables, it's very hard to predict what's going to happen with that insurance company in the future. And then I'd look at the leadership in terms of their track record in developing business that have sustainable long-term profitability.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's understanding these unpredictable risks of whether it was the pandemic, understanding what could happen with potential war breakout, but also the climate change. As I said before, having that type of hurricane activity, we've had 100 natural disasters reported through nine months of this year. That just hasn't happened in the past.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Home insurance has been one of the more complicated ones across the United States, but I think one of the biggest growing areas is what we call excess and surplus lines. It's a market that sits alongside the regulated market, and that has been growing significantly across the industry as well as for AIG.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“That would be too risky. Yeah, I think that there are some portions of what we call political violence coverage, but in areas where we know that there's an exposure, it gets very hard to underwrite that. And so we would have very limited capacity to be able to do something like that.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“We did provide, we had a business in Russia prior to the Russia-Ukraine conflict. We did not have a big business in Ukraine, but through Lloyds, we did have exposure to some classes of business through the war. And so assessing that is very complicated and one that you need to manage how much you're going to underwrite in a specific class that could have political violence or a war or terrorism.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a great privilege to be a CEO of a company like this, and we've been in a massive turnaround. I'm so fortunate to have so many good people with me at AIG. I think I had the longest tenure of six years of all of my executives, and I think over 60% of our top 100 are new to the company. And so like bringing that together to actually drive the outcomes that we have has been incredibly rewarding. And taking, as you said, there's short-term demands on CEOs, but taking a long-term view of a business and building foundational capabilities that are going to enable us to do much more for our clients over the long term, adapting to AI and adapting to a rapidly changing world is a high priority for me.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I think those three always come up on the geopolitical environment. I also think state sponsored cyber attacks and what does that do to a company? All of that is getting a lot of attention. And I think it doesn't matter what industry you're in, it has its impact. I think also global expansion, the resistance for acquisitions and support for companies to be able to acquire big businesses outside of the United States gets challenging as well.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Getting compromise and talking through specific issues is more challenging than it's been in the past, but we're trying to make progress.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I do spend time in Washington and spend time with lawmakers. I mean, the complexity of insurance is that we're state regulated. And so, you know, spending time with various state regulators and FCA and FSA in the UK and Japan respectively is where I spend more of my time.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I worry about it all. I mean, but for insurance, certainly inflation is one because we carry reserves for many years on our balance sheet and what the effect is of inflation as we pay claims over the long term. The investment rates, as I said, with fixed income, that's really strong for us in terms of reinvestment rates. And so allows us to do very well on the investment side. And I do worry about the global economy, GDP has been holding up, but certainly in the United States, I mean, a big part of the GDP is healthcare and tech. And so seeing consumer spending and driving sales through retail is something that we watch frequently.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“We have a distribution of agents and brokers that we're really a business to business, and so we source our business through that distribution channel. So us advertising to the end consumer has limited value in the products that we actually underwrite.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a very good business. The property and casualty business is totally different. I think the complexity in life insurance business is just, you know, they have so much investable assets. It's a spread business and one that has really different dynamics that drive its outcomes.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the thing I'm proud of the most is just the number of people that came to AIG and actually people that stayed to come together as an organization to actually try and improve our underwriting, our operational capabilities and there and our financial performance. And when we had a shed relative to our balance sheet 1.4 trillion dollars of exposure since we started. And so that was a dramatic change. We had to do 10 operational programs at once to get the foundation stability for the company for the future. And I actually think that part of the pandemic benefited us because we compressed that transformation and did it very fast and made dramatic improvements for the company. And then the financial performance started to really manifest itself from the efforts that we made on the underwriting side and the operations side. So it's just been a tremendous effort.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the unique part about our business is that in major disasters or things that happen like that, our clients need us. So it was immediately calibrating, focusing on helping. I was in the reinsurance business at that time, so helping insurance companies get back into business and helping raise capital and helping them assess what they needed to do going forward.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Was probably 20 minutes north of the building when it collapsed. I was never in danger of having soot or other things on me once the building collapsed.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“There was. I mean, it was orderly, but it was starting to get panicky of trying to get out of the building and rush our way down the stairwell.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“First plane went into Tower One. I had seen it, and so colleagues and I started to evacuate. Nothing urgent, but into the stairwell to make our way down and made it to about the 40th floor when the second plane went into the building, which I didn't know what it was at the time. I'd figured either Tower 1 had tipped over or something else had come into the building. And we had a sense of urgency of getting out there.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“That morning, so it was my sixth day of work at Marsh McClannon, and I was on the 53rd floor of Tower 2 that day to work.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's ironically. I never made it back to Boston, and so I stayed in New York early on in my career, I didn't think I could really work in New York City, which has been the predominant portion of my career. So I've always been in big companies, worked at ITT, and then I worked at General Electric and Marsh McClellan after that.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I find it very interesting. I mean, you're not doing the same thing all the time when you start in the industry. I mean, you're learning to build relationships, you're understanding 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.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“No, he didn't. I mean, the myth of him reading the insurance and reinsurance books at night is not true. He always encouraged me to do and pursue what I wanted. And quite frankly, I went to Boston College, graduated. And the reason why I want to enter the insurance industry was I wanted to stay in Boston in a company called the Hartford that was owned by ITT at the time 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.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I am worried about that. I mean, driverless vehicles are a big exposure, but I think that with AI, quality of vehicles, it's more predictable than perhaps it was in the past.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the complexity has been the density built up in areas that have significant exposure. If you think about the southeast of the United States for wind or wildfire in California, what happened as a effect of the pandemic is that people were moving into those areas and I'll make it up. But a $2.5 million house cost $5 million during the pandemic and people knocked it down and put up a 10. So all of a sudden you had all this density in areas that were already challenged to have enough insurance to be able to respond to the individual homeowners. So I think it's just become more complex at in more frequency of hurricanes and wildfire and you just have a market that is under a little bit of stress.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we are very specific in terms of what we want to underwrite. I mean, it has to be where we have skill, where we can deploy capital and get a fair return. So we don't really reflect the way Lloyds can ensure almost anything. It's much more a traditional specialty company that would have real strong expertise in scale in the areas that we underwrite.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I think generally speaking, the industry is making underrunning profit on its underwriting and it's on the investment side as well.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“75% of the portfolio tends to be fixed income. And so in this new interest rate environment, actually the investment income is going up. And then the remaining portion will be in some form of alternative investments such as private equity or commercial real estate. And that's done very conservatively. But we really are not going to win on just the investment income. You really need to make an underwriting profit. So we balance both very well.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I mean, that's not been AIG's past from 2009 to 2019. It lost over $30 billion in underwriting. And so coming in, I arrived in 2017 with a great team that followed me here. And we began that underwriting journey. And so now we do make underwriting profits. So for every dollar, we underwrite risk, we make around 10 to 12 cents of profit without the investment income.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's an unfair image. I think it probably perhaps is true years ago. But today, the contracts are much more clear, paying claims. That's what we do. I mean, we underwrite risks, but when we have to show up in moments that matter in terms of how we pay our claims and the amount of disputes are very small as a percentage of our overall portfolio, and I don't think that that's a fair assessment.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Artificial intelligence is finding its way into our business in a variety of different factors. I think the first piece is getting much better insight into data, which allows us to make better decisions on underwriting. It's also a great opportunity to service business better in terms of call centers and different ways of what's using robotics and other AI will be very helpful. But it is an emerging practice within the industry and one that is evolving very quickly. So it's also going to present risks that other companies, how they use it and how they use large language models and making sure the decision making is very sound. So it's complicated, but it definitely is benefiting the business today.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“That's correct, then that is true. Five out of the last six years, we've had over $100 billion of natural disaster losses in our industry. That's never happened before”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Property and casualty company, it's much more complicated to get the underwriting right than it is the investment side. And you're right, with inflation, the complexity of cyber risk today and other factors such as global warming, catastrophes, 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 you're underwriting is complicated. You need people with a lot of experience and a lot of good judgment in terms of making underwriting choices.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we insure businesses, small, medium, large commercial businesses for their property insurance or their auto or financial lines, which is directors and officers. And we also have a business that does harder to place business, such as contractors or businesses that may not find its way into the conventional business. And we also have a Lloyd syndicate, and we're a big part of Lloyd's as well.”
2023-11-30 · The David Rubenstein Show · Peter Zaffino · IDENTIFIED FROM THE TRANSCRIPT · source