As chief operating officer of AIU Holdings, Ralph Mucerino is no doubt of what his number one priority will be - making a profit so that AIG can pay back the US Government, dollar by dollar.

In a 30-year career with AIG, Mr. Mucerino rose to the rank of senior vice-president and president of AIG Global Marine and Energy. Despite the bailout and bonus controversies that generated widespread ill feeling towards the company, Mr. Mucerino is adamant that its property-casualty insurance operations are second to none.

On September 16 last year, the US Government came to the rescue of AIG with an $85 billion bailout. Since then the total federal commitment to the company has stretched to more than $170 billion. AIG has drawn $80 billion of that money, which it plans to pay back.

The company has sold off billions of dollars worth of assets in its worldwide empire of companies, but is determined to preserve its crown jewel - the property-casualty insurance operations now packaged as AIU Holdings - as the best way of generating the long-term profits necessary to pay off the debt.

Retaining business and staff had been a challenge, Mr. Mucerino said, as the enormous debts emanating from the Financial Products Division tarnished the reputation of the other, healthy AIG businesses and created doubts among customers."

AIU Holdings is a world-class operation," Mr. Mucerino said. "We have done a remarkable job of retaining client and broker relationships. A handful of major accounts have left us, but our business retention rate has been well up in the 90s.

"AIG is a holding company, not an insurer. The insurance companies are healthy and profitable and our broker partners and most of our clients understand that difference.

"Of course, risk officers, CFOs and boards ask questions about the situation, and 99 times out of 100, they get a satisfactory answer. The Federal Reserve and the US Government want our insurance companies to succeed because that's the best way to repay the Government."

The process of drawing clear lines between AIG and AIU Holdings is well under way, with the new entity to have a separate board and management. Mr. Mucerino said a new name was being considered for AIU Holdings.

No-one had been harder hit by the AIG scenario than its 115,000 employees around the world,

The numerous defections of key managers - many of whom have joined Bermuda companies such as Ironshore, Hiscox, Torus, Validus and Allied World - had not been as damaging to the company as some might think, Mr. Mucerino said.

"It's taken its toll on our people and of course, competitors have seen it as an opportunity to come in and take business and take people," Mr. Mucerino said. "When you look at AIU Holdings, our strength is still our people. We have 30,000 employees and we have great depth.

"We have lost some excellent people. Those were colleagues and friends and they are still friends. We wish them well.

But we still have a lot of great people who did not leave and who are seizing opportunities to move up in rank. The dedication of our people is remarkable."

As public frustration has grown with the amount of public money committed to keeping AIG afloat, so has the level and intensity of threats and abuse levelled against employees. This had been a particularly ugly part of the story, Mr. Mucerino said.

"To know that people have made death threats against executives is a sickening thought," he said. "There are some sick minds out there.

"We've had employees harrassed on the street when they've been wearing something that shows where they work. Jim Cramer (the host of CNBC show "Mad Money") actually urged the public to harrass us wherever we go, though he later went back on that.

"We even had a respected US Senator advising us to resign or commit suicide. That hurts. People should think twice before they say things like that. Jay Leno started one of his shows with seven straight AIG jokes.

"All of our people were innocent bystanders in all of this. AIG's problems stemmed from one small segment. Now 115,000 people are facing the wrath of hell. These people do not deserve this kind of treatment or commentary about them."

As a husband and a father with two daughters in school, Mr. Mucerino said he had run the gamut of emotions. While many among AIU Holdings' ranks had similar concerns, he said the staff had responded by showing fighting spirit, determination to succeed.

"Believe it or not, we don't have a morale problem," Mr. Mucerino said. "We have one objective - to continue to be successful and to pay back the Government."

Fingers have also been pointed by rivals, keen to capitalise on AIG's difficulties by winning market share from them.

In December, Liberty Mutual CEO Edmund Kelly said: "AIG has intensified its effort to increase its market share, or at least preserve it. I think it's fair to say they're doing some very stupid things in the market."

On a conference call with analysts in October, John Charman, founder and CEO of Bermuda-based Axis Capital described AIG as "our major and most aggressive competitor".

"As far as AIG are concerned, I shed no tears for them,"

Mr. Charman added. "I have been in the business for 37 years and I believe that any normalisation of AIG will be beneficial to the marketplace.

"It will release huge volumes of business throughout insurance portfolios, by product and by geography. I don't want to jump on their grave, but I think this is a very important event and positive for the marketplace."

Mr. Mucerino described the comments of both CEOs as "unfortunate" and denied the allegation of slashing prices to unreasonable levels.

"Throughout it all, we have maintained our focus on underwriting," the COO said. "We seek the right technical price for every piece of business and if we can't get that, then we walk away.

"I think our competition is very frustrated. They thought the market would desert AIG and they were rubbing their hands with glee. It did not happen because customers and brokers had faith in us."

AIU has had a presence in Bermuda for more than 60 years and Mr. Mucerino said the 200 people who worked on the Island played an important role.

"Bermuda is an important place, it's an insurance hub and we have utilised that to our advantage over the years,"

Mr. Mucerino said. "Bermuda is a key area for our risk management business and Brian McNamara, who's one of our top people there, sums up the loyalty and the strength of our employees in Bermuda."