Not for sale: AIG’s Asian general insurance business
By GENEVIEVE CUA
AIG will not sell its general insurance operations in Asia, AIG officials declared yesterday. Leslie Mouat, AIG regional president for South-east Asia, yesterday told reporters that AIG would ‘absolutely’ not consider even the sale of minority stakes.
As for the Asian life business, however, AIG has said that it would retain majority ownership but would seek ‘minority strategic investors’ to take a slice of the business.
Reuters yesterday reported that the Philippine life business has received offers and there are also plans to sell the Thai consumer finance company.
Speaking to reporters yesterday, Mr Mouat said that the Asian non-life business is ‘exceptionally profitable’. ‘In every market, we exceed the regulatory margin of solvency requirement, in some cases by five to six times.
‘I’d like to say it’s business as usual, but very clearly our reputation has taken a bit of a hit in the last few weeks. We’re working exceptionally hard to rebuild that reputation.’
Last week, parent AIG Inc announced that it would refocus on the core property and casualty insurance business, and generate sufficient liquidity to pay the outstanding balance of a loan from the US Federal Reserve. AIG has drawn US$61 billion of the US$85 billion facility as at end-September.
S&P last Friday revised the outlook on AIG and its guaranteed subsidiaries to ‘negative’ from ‘developing’, citing risks to the insurer’s plan to sell assets. S&P said that the US$61 billion drawn so far was larger than expected, ‘causing the scope of the planned business sales to exceed our expectations’.
Mr Mouat said that AIG’s foreign general insurance business has collected US$8.1 billion in net premiums in the first half of the year, and generated profits of US$1.5 billion.
Kevin Goulding, president of American Home Assurance Co, said that the Singapore business ranks highest in terms of assets in the industry at US$650 million, of which US$100 million is in cash. ‘Our brand has been tarnished . . . Hopefully, we will be able to turn that around pretty rapidly.’
Premiums rose 19 per cent last month on a year-on-year basis. ‘Growth for the month has been one of the best. Retention didn’t suffer,’ he said.
Source : Business Times - 07 Oct 2008
Singapore Property - Buy, Sell, Rent, Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com ( email me )
Kovan Melody @ Kovan Road For Sale »« Blossoms @ 12 Woodleigh Close For Sale
