American International Group, Inc. (AIG) has launched Collateral Flex Option (CFO), a new risk financing solution for companies with large deductible casualty insurance programs in the U.S.
CFO provides a flexible alternative for companies that would otherwise need to tie up capital or maintain costly lines of credit to meet the collateral requirements that come with large deductible policies. The CFO option is available for a wide range of companies, including those that need it most: smaller firms that may have yet to earn an investment-grade rating.
"Posting letters of credit or other forms of collateral for large deductible insurance programs can exacerbate the challenges companies already face with tight credit markets," said Russell Johnston, Product Line Executive, US and Canada. "We're offering customers an option that did not exist before. "
CFO is available to qualified AIG clients as a way of deferring collateral requirements by up to 50% on large deductible Workers Compensation, General Liability, and Commercial Automobile Liability insurance policies, on an annual basis. Annual CFO amounts deferred for all policy periods of the company's insurance program with AIG can range from a minimum of $500,000 to a maximum of $5,000,000, subject to a limit of 50% of the insured's total annual collateral posting requirement.
"CFO is an innovative risk management finance solution for customers who want to put more of their capital at work for their business," said Joseph A. Davide, Senior Vice President and Product Line Officer, US Primary Casualty. "This was evident in the positive feedback that we received from a diverse group of companies that took part in a recent pilot program."
For more details, please contact your AIG Regional Casualty Executive. Eligibility for CFO will be solely at AIG's discretion.