There are also no plans to lay off staff, says insurer's regional head
By
Gabriel Chen
American International Group (AIG), which was saved from collapse by the US government last month, said it had no plans to sell its non-life insurance businesses. -- PHOTO: REUTERS
GENERAL insurer American Home Assurance (AHA), which has a sizeable operation in Singapore, will not be sold off in the fallout from the financial crisis, the embattled parent firm said yesterday.
The parent, American International Group (AIG), which was saved from collapse by the US government last month, said it had no plans to sell its non-life insurance businesses.
Speculation had been mounting that AIG might have been forced to sell such businesses in order to repay up to US$85billion (S$125 billion) borrowed from the US government as part of the rescue deal.
AHA employs 450 staff here. Thousands of consumers have non-life policies such as health, accident and car policies with the insurer.
Last Friday, AIG said it would not be selling a majority stake in its coveted foreign life units, including AIA Singapore, which was initially hit by queues of policyholders seeking to redeem policies.
At a media conference yesterday, AIG's regional president for South-east Asia, Mr Leslie Mouat, said AIG would not consider selling even a minority stake in its non-life business.
'Absolutely not. We run an exceptionally profitable business and we like the financial strength,' he said. 'And our agents have been absolutely phenomenal during the process.'
AIG almost collapsed last month following credit downgrades and write-downs tied to the US housing sub-prime crisis. The US government then acquired the right to purchase 80per cent of AIG's stock in return for a credit line of US$85 billion. So far, AIG has drawn down US$61 billion of that.
AIG employs 3,500 people in its non-life business in Asia, said Mr Mouat, who oversees AIG's non-life operations for Singapore, Hong Kong, Taiwan, Malaysia, Indonesia, the Philippines, Thailand, Vietnam and Guam.
'There are no plans for redundancies or layoffs,' he said of the non-life business yesterday.
Since the United States Federal Reserve went to the group's rescue three weeks ago, he said there had been only three staff resignations out of 3,500 people employed in its non-life business.
He admitted that AIG had seen its reputation affected by the crisis but 'we're working hard to repair it', he said.
AHA president Kevin Goulding said that the firm had received fewer than 20 complaints and queries to their call centres and front counters since the crisis started several weeks back, though these numbers 'are nothing out of pattern'.
The main concern of these customers, he said, would be whether AHA could still pay out their claims.
But the funds of AHA in Singapore, he said, are 'ring-fenced', so the assets will not go to parent AIG.
Singaporeans should rest assured that their policies are safe, he said.
Still, he said that a few commercial clients had terminated their policies. 'But we've already spoken to them to work with them next year,' he said.
He added that, at AHA Singapore, total premiums on the books surged 19 per cent last month from a year earlier.
Separately, AIG said yesterday that it had received offers for its Philippine insurance businesses and announced plans to sell its Thai consumer finance units.
AIG also said it planned to sell its three Japanese life insurance businesses.
Meanwhile, the Financial Times reported that AIG intends to offload up to 49 per cent of AIA, a sale that analysts predict could yield about US$20 billion.
LIFE Insurance Association (LIA) Singapore has appointed Mr Darren Thomson as its president.
Mr Thomson, the president and chief executive of Manulife Singapore since April 2006, takes over from outgoing LIA president Mr Mark O'Dell.
Mr O'Dell quit as the Singapore general manager of American International Group's life insurance unit here last month, and took up a post as head of Manulife's Taiwan operations.
Mr Thomson has 22 years of experience in the financial services industry, working in Britain and Asia.
He came to Asia in 2000 and joined Manulife Financial in HongKong where he created new regional bancassurance functions for the Asia division as well as other non-agency distribution channels for the company.
Meanwhile, Great Eastern (GE) Life's managing director, Mr Tan Hak Leh, has been elected to serve as LIA deputy president.
Mr Tan, a council member of the Singapore Actuarial Society, has more than 15 years of experience in the life insurance industry.
Prior to joining GE Life, he was a director of the Insurance Supervision Department of the Monetary Authority of Singapore.
