Wed, Oct 07, 2009 - Page 11 News List

AIG close to agreement on Nan Shan Life Insurance sale

BLOOMBERG

American International Group Inc (AIG), the insurer bailed out by the US government, is near an agreement to sell its Taiwan life insurance unit to Primus Financial Holdings Ltd, people familiar with the matter said.

New York-based AIG is in advanced talks with Primus and the two companies may sign an agreement as early as next week, the three people said, asking not to be identified. Primus Financial, co-founded by former Citigroup Inc Asia investment banking chief Robert Morse, offered more than US$2 billion for AIG’s Taipei-based Nan Shan Life Insurance Co (南山人壽), two of the people said.

AIG, once the world’s biggest insurer, is divesting units to repay loans included in its US$182.5 billion government bailout. The selection of Primus Financial would end a four-month battle for Nan Shan that pitted the Hong Kong-based company against Chinatrust Financial Holding Co (中信金控) and Cathay Financial Holding Co (國泰金控).

Jennifer Chen, a spokeswoman for Primus, declined to comment. An outside spokeswoman for AIG, who declined to be identified citing company policy, had no comment.

Primus and Chinatrust sweetened terms of their offers last month as they entered final talks with AIG, two people familiar with the matter said. Fubon Financial Holding Co (富邦金控) and Cathay Financial dropped out of bidding after AIG rejected their offers, they said.

Nan Shan, with 4 million policyholders, is burdened with unprofitable guaranteed-return policies it sold in the 1990s when interest rates were higher, raising concerns that a buyer may need to inject more capital.

Nan Shan’s 36,000 agents are also asking AIG to return NT$14 billion (US$435 million) in pensions that may have been used as operating capital for Nan Shan, Grace Fung (馮影), an agent who represents the employees, said in August. AIG on Aug. 21 agreed to return 27 percent of the amount once it finds a buyer for Nan Shan, Fung said.

This story has been viewed 1977 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top