Wed, Sep 12, 2007 - Page 12 News List

AIG sets up new affiliate to tap into wealth market

AFFLUENT CLIENTELE Competition to serve Taiwan's high net-worth individuals is intensifying, with AIG Wealth Management Services the latest to join the fray

STAFF WRITER , WITH BLOOMBERG

American International Group Inc (AIG), the world's biggest insurer, launched its wealth management business in Taiwan yesterday, saying it expected the new business to become profitable by the end of next year.

The new business, AIG Wealth Management Services Taiwan (友邦證券), aims to tap into the nation's base of affluent investors looking to invest upwards of US$100,000, the company said in a statement yesterday.

AIG Wealth Management is also aiming to secure 10 percent of the nation's wealth management market within five years, Peter Wild, chief executive officer at AIG's private banking unit, said at a launch ceremony.

Taiwan is the second Asian market after Hong Kong where AIG has opened wealth management operations.

AIG Wealth Management is the newest addition to the AIG group of companies in Taiwan, which includes Nan Shan Life Insurance Co (南山人壽), AIG Credit Card Co (友邦信用卡), AIG Finance (Taiwan) Co (友邦資融), AIG Investment Corp (友邦投顧), AIG Securities Investment & Trust Co (友邦投信), AIU Insurance Co (美國環球產險), American Life Insurance Co (美國人壽) and United Guaranty Mortgage Indemnity Co (聯合保證保險).

AIG Wealth Management signed a memorandum of understanding with Nan Shan yesterday to market its wealth management products through the life insurer's domestic network of 33,000 salespeople, the statement said.

"We are not hiring hundreds of relationship managers as AIG Private Bank [did]. We are employing AIG's sales force to bring their clients to us," Wild said. "You need a certain timeframe to break even, which should be the end of next year."

Nan Shan, one of the nation's top three life insurers, now serves 3.7 million clients, with more than 7.4 million life insurance policies in effect.

AIG Wealth Management hopes to build its business by signing up the 9,000 to 10,000 high net-worth clients with investable assets of US$2 million that its insurance affiliate now serves, it said.

The competition to sell tailor-made wealth management products to the affluent is heating up in Taiwan, where the richest citizens hold more assets than in any Asian country except China and Japan.

UBS AG, HSBC Holdings PLC and Standard Chartered PLC have stepped up hiring in the nation to grab market share.

UBS said earlier last month it aimed to manage a 10th of the nation's private wealth by 2015. The Swiss bank currently manages about 1 percent of onshore wealth in Taiwan.

HSBC said earlier this month it planned to make wealth management one of its top priorities in the nation, aiming for a 6 percent to 7 percent market share in three years, while Standard Chartered said last month that it would begin private banking next year.

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