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AMERICAN INTERNATIONAL GROUP INC.
With the market for Canadian company initial public offerings expected to boom, American International Group Inc. has launched Prospectus Edge, a directors and officers liability insurance product created for Canadian risk managers.
In addition to specifically referencing Canadian laws, rules and regulations, the product is available in French for Quebec clients.
Canadian demand for D&O policies traditionally has been satisfied with products developed in the United States or Europe, where legal terminology differs, said Robert Yellen, New York-based chief underwriting officer for AIG's U.S. and Canadian financial lines.
“What really makes Prospectus Edge cool is that it was built by a Canadian team,” Mr. Yellen said. It was developed to meet “broker demand for a better solution in Canada than what London was offering.”
Meeting such demand earned the product a 2013 Innovation Award from Business Insurance.
AIG said it released Prospectus Edge in November because the New York-based insurer expects a future wave of Canadian IPOs.
But AIG already has bound accounts that purchased Prospectus Edge and there is a “robust pipeline” of additional accounts interested in the coverage, Mr. Yellen said.
“It's rare that you have people that are binding days after you launch. That is pretty much what we had,” he said.
Among other features, the policy's coverage extends beyond traditional D&O to cover other company stakeholders who may be exposed by the offering, such as private equity firms and even family members involved in starting up the operation, Mr. Yellen said.
“If a claim comes in, they could also be targets, so why shouldn't they get the benefit of coverage?” Mr. Yellen asked rhetorically.
The policy also offers a multiyear reporting period so that buyers have coverage in subsequent years after the IPO offering, Mr. Yellen said. In that way, the coverage focuses on when the IPO transaction occurs rather than on a policy period.
Products and services ranging from a Web-based portal to ease the process of complying with state auto insurance requirements to software that spots questionable prescription drug use have been recognized with 2013 Innovation Awards from Business Insurance.