AIA loses 2,000 policies
By Lorna Tan, Finance Correspondent
On Thursday, the Singapore AIA office took out full-page ads in local newspapers to reassure its policyholders that it has 'more than sufficient capital and reserves to meet all obligations.' -- PHOTO: BH
WORRIED policyholders terminated some 2,000 policies with AIA Singapore in the last few days despite a US government bailout of its parent company, global insurance giant American International Group (AIG).
This worked out to be less than 0.1 per cent of the 2 million plus AIA policies here, said American International Assurance Company, a wholly-owned subsidiary of insurance giant AIG.
On Thursday, the Singapore AIA office swung into full damage control mode, taking out full-page ads in local newspapers to reassure its policyholders that it has 'more than sufficient capital and reserves to meet all obligations.'
Despite short-term liquidity pressures at AIG, the Singapore unit is a 'strong, well-positioned business,' Mr Mark O'Dell, AIA's executive vice-president and general manager, wrote in the advertisement.
He said the funds in Singapore were segregated from AIG.
AIA also placed a special team to personally call policyholders. For customers who may change their minds after surrendering their policies, the insurer has agreed to waive the usual penalties for reinstatement of policies.
Unlike the mayhem that descended on the AIA offices in the past few days, there was a shorter queue of customers on Thursday morning.
This is partly due to more effective crowd control measures. Only 500 queue numbers were given out on Thursday at the customer service centre at Finlayson Green.
This was half of the 1,000 customers who thronged the centre on Wednesday. The huge number kept the service staff working till 12.30am.
'We can't handle so many customers. We need our rest so we can continue to work the next day,' a tired AIA staff told The Straits Times.
One policyholder, who wanted to be known as Ms Soh, 50 was disappointed when told to return at 11am on Friday. She wanted to surrender two policies, one of which is a 21-year endowment plan.
In other AIG offices across Asia, the number of people cashing out or ending their policies also fell sharply on Thursday.
In Taiwan, a little more than 600 policyholders of Nan Shan Life Insurance, an AIG subsidiary, registered at a regional office in downtown Taipei by late afternoon. The number was half that of the previous day.
In Hong Kong, AIG's subsidiary said on Thursday that more than 2,000 policies had been terminated by customers who feared a collapse. That number was small considering the company had written 2.2 million policies for 1.3 million customers, said Mr Derek Yung, senior vice-president and general manager of AIA for Hong Kong and Macau.
Authorities and AIA subsidiaries around the region also sought to assure customers that the local firms were not in danger.
AIG was on the brink of collapse after more than a week of panic and turmoil in financial markets that led to the failure of US investment giant Lehman Brothers and a sale of Wall Street rival Merrill Lynch.
They were all casualties in a financial crisis that grew out of troubles in the US subprime, or higher-risk, mortgage sector last year.
By Lorna Tan, Finance Correspondent
On Thursday, the Singapore AIA office took out full-page ads in local newspapers to reassure its policyholders that it has 'more than sufficient capital and reserves to meet all obligations.' -- PHOTO: BH
WORRIED policyholders terminated some 2,000 policies with AIA Singapore in the last few days despite a US government bailout of its parent company, global insurance giant American International Group (AIG).
This worked out to be less than 0.1 per cent of the 2 million plus AIA policies here, said American International Assurance Company, a wholly-owned subsidiary of insurance giant AIG.
On Thursday, the Singapore AIA office swung into full damage control mode, taking out full-page ads in local newspapers to reassure its policyholders that it has 'more than sufficient capital and reserves to meet all obligations.'
Despite short-term liquidity pressures at AIG, the Singapore unit is a 'strong, well-positioned business,' Mr Mark O'Dell, AIA's executive vice-president and general manager, wrote in the advertisement.
He said the funds in Singapore were segregated from AIG.
AIA also placed a special team to personally call policyholders. For customers who may change their minds after surrendering their policies, the insurer has agreed to waive the usual penalties for reinstatement of policies.
Unlike the mayhem that descended on the AIA offices in the past few days, there was a shorter queue of customers on Thursday morning.
This is partly due to more effective crowd control measures. Only 500 queue numbers were given out on Thursday at the customer service centre at Finlayson Green.
This was half of the 1,000 customers who thronged the centre on Wednesday. The huge number kept the service staff working till 12.30am.
'We can't handle so many customers. We need our rest so we can continue to work the next day,' a tired AIA staff told The Straits Times.
One policyholder, who wanted to be known as Ms Soh, 50 was disappointed when told to return at 11am on Friday. She wanted to surrender two policies, one of which is a 21-year endowment plan.
In other AIG offices across Asia, the number of people cashing out or ending their policies also fell sharply on Thursday.
In Taiwan, a little more than 600 policyholders of Nan Shan Life Insurance, an AIG subsidiary, registered at a regional office in downtown Taipei by late afternoon. The number was half that of the previous day.
In Hong Kong, AIG's subsidiary said on Thursday that more than 2,000 policies had been terminated by customers who feared a collapse. That number was small considering the company had written 2.2 million policies for 1.3 million customers, said Mr Derek Yung, senior vice-president and general manager of AIA for Hong Kong and Macau.
Authorities and AIA subsidiaries around the region also sought to assure customers that the local firms were not in danger.
AIG was on the brink of collapse after more than a week of panic and turmoil in financial markets that led to the failure of US investment giant Lehman Brothers and a sale of Wall Street rival Merrill Lynch.
They were all casualties in a financial crisis that grew out of troubles in the US subprime, or higher-risk, mortgage sector last year.
