21st Century Insurance, a subsidiary of American International Group Inc., is closing four offices and laying off about 7% of its work force to “control expenses,” said AIG.

AIG spokesman Peter Tulupman said the decisions also were made because of decline in premium but it has nothing to do with the company’s financial strength. Shortly before the layoffs were announced, Anthony DeSantis, 21st Century chief executive, sent an e-mail to customers assuring them of the company’s stability and that it did not need any of the bailout funds given to its parent company.
“There are still no issues as far as that goes,” said Tulupman. “Nothing has changed.”

According to an AMB Credit Report, 21st Century Insurance Cos. posted a $39.1 million profit in 2008 after a net loss of $10.3 million in 2007. Direct written premiums dropped to about $1.15 billion from $1.32 billion in 2007 and the group’s combined ratio was 113.5 in 2008.

Employees at the insurer’s 38 offices were told that, as of April 30, four would be closed — Long Beach, Calif.; Birmingham, Ala.; Charlotte, N.C.; and Madison, Wis. In addition, at the end of June, offices will be consolidated in Arizona, Connecticut, Colorado and Washington, Tulupman said.

In November 2008, as AIG worked out the latest details of its bailout plan, the company decided to rebrand AIG Direct as 21st Century Insurance, the name it had before AIG bought out the company in September 2007 (BestWire, Nov. 25, 2008). AIG bought the last 38% of 21st Century it did not already own for $813 million.

The 21st Century Insurance Group primarily markets direct personal automobile and personal excess liability policies in California, where it ranks as the seventh-largest personal automobile carrier, and 17 other states, with Texas, Florida, Arizona and Pennsylvania rounding out the top five, according to an AMB Credit Report. The group has a reputation of being a low-cost, high-quality service provider of auto insurance, and has a competitive expense advantage because of its direct distribution approach and efficient cost structure, the report said.

21st Century Insurance Cos. currently have a Best’s Financial Strength Rating of A (Excellent).