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World Business Quick Take

■INSURANCE

AIG head forfeits severance

Robert Willumstad, the outgoing head of the stricken insurance company AIG, has voluntarily forfeited a US$22 million severance package after being effectively sacked from his job as part of a bail-out by the US treasury. AIG’s board decided that he was entitled to the money under his contract, which was drafted in generous terms just three months ago. But in an e-mail to his successor, Edward Liddy, he wrote: “I prefer not to receive severance while shareholders and employees have lost considerable value in their AIG shares.” AIG was kept afloat last week through an US$85 billion US treasury loan; the government will take an 80 percent stake in AIG in return.



■ENERGY

Oil price falls

Oil dropped US$3 a barrel yesterday, weighed by doubts about the US bailout plan and as investors booked profits after a historic one-day rise in the previous session. Although oil surged a day earlier on hopes the plan would support the economy and fuel demand, analysts said doubts lingered over how the package would be paid for. US crude for November fell US$3.01 to US$106.36 a barrel by 0915GMT. Brent crude for the same month was off US$3.12 to US$102.92. The November US crude contract rose nearly US$7 on Monday, while the expiring October contract, which traded up to US$25 higher, settled up 15.7 percent at US$120.92 — the biggest one-day gain on record.



■SOUTH KOREA

Businessman calls for calm

The head of a major South Korean business organization called on the government yesterday not to overreact to financial turmoil in the US by imposing unnecessary rules. “I don’t think the current developments in the United States is a sign that the government should be going back to the strong regulations it has been imposing in the Korean markets,” Sohn Kyung-shik, chairman of the Korea Chamber of Commerce & Industry, told reporters. Sohn, who also serves as chairman of food, entertainment and shopping conglomerate CJ Corp, acknowledged that the current crisis has rocked South Korean equity and foreign exchange markets and that funding will likely get harder for South Korean businesses. He warned that South Korea’s real economy could suffer if the turmoil is not contained.



■CHINA

Home-buying drops

Interest in buying homes in Chinese cities dropped to the lowest level in almost a decade, reflecting concerns over personal incomes, state media reported yesterday. Only 13.3 percent of respondents said they planned to buy apartments in the next three months, the lowest level since 1999, the Shanghai Securities News reported, citing a survey by the People’s Bank of China (中國人民銀行). The central bank said it collected responses from 20,000 people in 50 cities, but the report gave no details of how the survey was conducted. No margin of error was provided.



■INSURANCE

Ike costs US$14 billion

Hurricane Ike will cost the global insurance industry up to US$14 billion, Swiss Reinsurance Co said yesterday. Ike caused widespread damage in Cuba and the Texas Gulf coast earlier this month. Insured losses from the hurricane are estimated to be between US$7 billion and US$14 billion, the company said. Losses from Hurricane Gustav were between US$2.5 billion and US$4 billion.


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