The Hong Kong subsidiary of troubled insurance titan AIG said yesterday that more than 2,000 policies had been terminated by customers who feared a collapse.
In a bid to lure back their customers, American International Assurance (AIA) said it would waive re-admission charges and a health declaration requirement for those who decided to revive their life insurance policies with them.
“We hope that our customers are convinced that our business remains sound and profitable,” Derek Yung (容佳明), senior vice president and general manager of AIA for Hong Kong and Macau, told a press conference yesterday.
“If the customers decide to come back to us in the coming two weeks, we will waive the requirement for them to provide proof of their health conditions,” he said, adding that the measure was “unprecedented in Hong Kong.”
The policies were terminated as panic spread after the US Federal Reserve handed its parent company AIG an unprecedented US$85 billion rescue loan on Tuesday in an attempt to avoid a global economic shock.
Yung said the number of policy cancelations was small, considering that they had written a total of 2.2 million policies for their 1.3 million customers.
The subsidiary also denied reports that there were plans to sell their business and maintained they were financially separate from AIG.
“Even though AIA Hong Kong is a subsidiary of AIG, it keeps a separate and sound book of its own. AIA is well-capitalized and will continue to operate as normal to meet customer needs,” Yung said.
“From the information we have got at this stage, we will not be selling our business,” he said.
Meanwhile, the Singapore chief of American International Assurance Co (AIA) resigned yesterday as surrendered policies mounted with hundreds of customers unconvinced of the insurer’s soundness.
Mark O’Dell — who has been trying to persuade policyholders that AIA, a unit of the troubled American International Group (AIG) Inc, could meet its obligations — was said to be joining a rival firm and a new general manager would start today.
The company said O’Dell’s decision was not related to the three days of customers withstanding long lines and sweltering heat to enter its service center. By the end of the day yesterday, those waiting were given numbers and told to return today.
“Even with the AIG bailout by the US government, everything is still uncertain,” said Karen Tan, a 42-year-old woman with no intention of keeping her policies.
The insurer was said to be studying the option of allowing customers who terminated their policies to reinstate them without having to pay a penalty.
Reassuring statements from AIA and the Monetary Authority of Singapore that the insurer could meet its obligations were on prominent display.
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