AIG subsidiary 21st Century downsizes
AIG subsidiary 21st Century Insurance said Thursday that it had laid off about 7% of its workforce -- nearly 500 workers -- and that it was losing its Long Beach office and three other locations.
Just a week ago, 21st Century sent an e-mail to its customers from Chief Executive Anthony DeSantis saying that 21st Century was “financially strong” and that it had “not accessed or needed” any of the billions of bailout money that its New York-based parent company got.
But 21st Century, which sells car, home and other types of insurance, has been hit by a sales decline, said Joe Norton, a spokesman for American International Group Inc.
“We are operating in a difficult financial environment,” he said.
Some of that difficulty is due to the widespread public backlash against AIG in the wake of the taxpayer bailout. “That’s part of it,” Norton said.
Employees at 38 offices nationwide were told Tuesday that they were being laid off.
The majority of those leaving are in California, Norton said. The Long Beach office will remain open until the end of the month.
The Woodland Hills office, which was company headquarters before AIG took over in September 2007, lost more that 50 employees in the layoffs, Norton said.
Before the layoffs, 21st Century had about 6,500 employees, according to the e-mail sent to policyholders.
AIG doesn’t break out figures on revenue for 21st Century, and the company wouldn’t disclose how many policyholders it has.
Although the consumer insurance industry has remained relatively steady during the economic downturn, 21st Century was in a particularly difficult position to battle the outrage directed at its parent company, which paid $165 million in employee bonuses.
Most 21st Century policies are sold over the phone, online or through direct mailings.
“They don’t have any agents out there to hold the hands of the policyholders,” said Jim Rogers, an insurance industry consultant.
After it was acquired, 21st Century was renamed aig direct.com.
The company went back to its old name in November, but that didn’t seem to help much.
Although the DeSantis e-mail said 21st Century would “continue to deliver outstanding coverage, service and payment of claims,” Rogers believes there is an uneasiness about the insurer.
“People look at AIG as a whole and not separate parts,” Rogers said. “A lot of people don’t trust them anymore, even if they say everything is fine.”
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