Business

Wednesday September 17, 2008

AIA: Turmoil in US will not hurt Malaysian ops

BY DALJIT DHESI


PETALING JAYA: The financial turmoil rocking insurance giant American International Group Inc (AIG) would not affect its Malaysian operations, the group’s Malaysian subsidiary said yesterday.

A spokesman from American International Assurance Bhd (AIA) told StarBiz: “We are not impacted by the recent financial or subprime mortgage issues in the US as we are locally incorporated. Furthermore, all our assets are invested locally.”

According to the Wall Street Journal, AIG had lost US$18bil over the last three quarters, largely due to losses linked to subprime mortgages.

The insurer, in an effort to stave off rating downgrades and shore up capital, had made an unprecedented approach to the Federal Reserve seeking US$40bil in short-term financing, the New York Times said.

Citing sources, the Wall Street Journal said the Federal Reserve had recently asked Goldman Sachs Group and JP Morgan Chase to help provide US$70bil to US$75bil in loans to AIG to help prevent further downgrades of its credit ratings.

AIA is one of the leading insurers in Malaysia and apart from offering life and general insurance, the company also offers investment-linked products as well as loans for homes and shops.

Meanwhile, Bank Negara, when asked if it would scrutinise the disbursement of loans of AIA and other financial institutions, said it would “closely monitor all financial institutions under our purview and would take all the necessary actions to maintain the stability of our banking and insurance industry”.

AIA started operations in Malaysia in 1948 and had grown rapidly over the past 60 years. Currently, it has 23 branches nationwide, supported by over 8,000 agents serving more than 1.5 million policyholders. (see also B10)


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