Business
AIG Solution Driving Industry Sector Profits Much Lower (AIG, ACE, CB)
AIG Solution Driving Industry Sector Profits Much Lower (AIG, ACE, CB)
About this update from Genesis Ai Corp
[{"type":"text","content":"\nAIG Solution Driving Industry Sector Profits Much Lower (AIG, ACE, CB)\n\n\n Mar. 23, 2009 (Baystreet.ca) -- Tom Reese/Paul Rubillo, Dividend.com\nBig piece in this morning's WSJ on how AIG (AIG) is cutting prices as much as 30% to win business.\nNow as consumers and businesses this is a good thing in the short term. Unfortunately from what we are hearing and seeing this will hurt the profit margins of other competitors in the space, like ACE (ACE) and Chubb (CB). Now again, we can say, what's wrong with that? The problem I see is that you are now weakening what were previously strong companies. Eventually the only answer the competitors will have to be able to keep up with the price cuts is cut jobs to try and maintain profitability.\nI love the idea of consumers getting the savings, but the risk of insurers getting fundamentally damaged is the last thing we may want to see. The next area this may become a problem with may be the banks. Time will tell. Fixing one thing and potentially damaging many other healthy areas of the market or a sector is not my idea of a solution. Will this happen in the banking industry next? Time will tell.\nBe sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.\n\n\n Newstex ID: BAY-1002-33351258\n\n","length":1487,"tagName":"div"}]