NEW YORK--Amid the near-collapse of American International Group Inc. last week, brokers sought to advise clients about coverages placed with AIG and instill calm in a week that was anything but.

Initial fears of bankruptcy and a "run on the bank" mentality by clients gave way to some relief after the Federal Reserve Bank of New York agreed to extend to AIG an $85 billion loan last Tuesday.

The bailout, brokers say, gives clients more time to evaluate their existing insurance programs and make rational decisions about whether to stick with AIG, which is expected to sell various units to raise capital to retire the Fed financing, or look elsewhere for coverage.

Many of the brokers conducted calls with clients during the week and posted information on their sites to keep clients informed.

While risk managers expressed concerns about AIG's insurance operations, brokers stress that the insurance giant's liquidity crisis does not affect the assets available to pay claims. Despite ratings downgrades, AIG remains competitive and on brokers' approved guidelines for placement.

AIG, meanwhile, sought to allay fears, noting its commercial insurance operations are not for sale and remain secure (see story, page 1).

AIG's corporate troubles are far from over, though, and brokers continue to monitor the situation and give clients as much information as possible, they say.

"Our approach (to clients) is this: We're all over it. We have as good or better information than anyone else and we're going to share that with you to put you in a position to make really informed decisions. We recommend that you (ask us to) go look for alternatives, but we're not going to make you do it," said Tom Golub, president and chief executive officer of Beecher Carlson Holdings Inc.

He said the Atlanta-based brokerage is advising clients to prepare for changes at AIG, including further ratings downgrades or possible sales, and determine what they would do next. "If you're worried about that change and that means it's going to influence your choice about which carrier you're with for this renewal, factor it in," Mr. Golub said.

He noted that several clients with Oct. 1 renewals are focusing on where AIG is positioned in their programs and, in many cases, are moving the insurer from a primary to an excess position.

"The last few days have been pretty shocking," said Simon Hodge, managing director and executive liability national practice leader at Wachovia Insurance Services Inc. in Atlanta. "Clients are trying to get a good idea of what to do with their D&O business," he said, noting that most clients are taking a wait-and-see approach.

"But we are certainly seeing a lot more anxiety with clients that have renewals coming up in the next 30 days," Mr. Hodge said. "We will be presenting clients with alternatives and looking at all the options."

"Our clients with (D&O) renewals approaching are telling us they want options," said Christopher Brown, executive chairman of Lockton Cos. L.L.C.'s corporate risk solutions group in London, "A lot of other" insurers are taking advantage of the situation, he said.

"One of the key challenges for AIG will be to retain talent," Mr. Brown said. "If they lose people, they may lose clients. It's very important to clients." Messrs. Hodge and Brown made their comments during a Sept. 18 policyholder adviser conference in New York hosted by Anderson Kill & Olick P.C.

On its Web site, Kansas City, Mo.-based Lockton advises AIG policyholder clients to consider "numerous factors" when evaluating their insurance programs in light of the insurer's troubles. Those factors include possible changes in fixed costs, replicating similar deductible levels and breadth of coverage, limitations on available capacity and insurer restrictions on collateral release.

"The good news is that AIG has bought time, albeit at a steep price," Lockton said in its AIG bulletin.

AIG's insurance operations remain "solid, well-capitalized concerns fully capable of continuing to pay claims," the bulletin said, and a potential bankruptcy filing by AIG's holding company "should not automatically trigger insolvency proceedings" at the insurance subsidiaries, all of which are solvent.

In a statement, a spokesman for London-based Willis Group Holdings Ltd. said the broker is monitoring the AIG situation closely.

"We continue to advise our clients to take a calm and thoughtful approach to reconsidering their coverages at this time, particularly when it comes to existing policies," the Willis spokesman said. "As their broker, we have an obligation to help our clients investigate alternative strategies based on their unique objectives and circumstances, while factoring in the cost, coverage and security implications of each possible scenario."

To keep its clients informed, New York-based Marsh Inc. held a client call on Friday led by Marsh CEO Dan Glaser and featuring John Q. Doyle, president and CEO of AIG Commercial Insurance, and Robert S. Schimek, chief financial officer, AIG Property Casualty Group. The AIG officials gave a firsthand account of what is happening at the insurer for roughly 10,000 Marsh clients, the brokerage said.

"We have spent a great deal of time explaining the regulatory protections for policyholders as well as the financial position of AIG's insurance subsidiaries. The vast majority of our clients are taking a measured approach and are maintaining their current insurance programs," Marsh said in a statement.

Chicago-based Aon Corp. also conducted clients calls, set up a "situation room" on its Web site and established "broking war rooms" around the world staffed with executives to answer technical questions for its clients.

While brokers say most AIG policyholders remained with the insurer at the end of last week, many clients initially wanted to pull their business from AIG.

Clients' mood "Monday and Tuesday was extremely concerned, particularly around the prospect of a bankruptcy," said Ted Devine, president of Aon Risk Services in Chicago. After the Fed action, however, concerns were more about "what businesses are part of the restructuring, what are the implications for the deep underwriting talent at AIG and is there more" bad news to come for AIG, he said.

While some clients may have had to move business away from AIG due to contracts sensitive to credit rating downgrades, "the majority of cases" have kept their coverage in place, said Steve McGill, CEO of Aon Risk Services in Chicago.

Jim W. Henderson, vice chairman and chief operating officer of Brown & Brown Inc. in Daytona Beach, Fla., said clients with insurance ratings mandates were calling early in the week asking for alternatives. Clients were saying: "We don't want to be in jeopardy. We want you to go ahead and secure another quote with an adequately rated organization. The decision has nothing to do with whether or not AIG is redeemed and they get the rating. We can't wait that long. This is our policy. Do it right now."

On Thursday, Mr. Henderson said "the waters are calmer with the time and distance afforded by the Fed" and a vast majority of its AIG policyholder clients are staying put.

"We are pleased as well as our customers that we don't have to replace coverage," he said.

Editor Regis Coccia and Associate Editor Colleen McCarthy contributed to this report.