Insurance survey 2009: Insurers take cover to avoid capital crunch
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"The attack on our people and our business has been unprecedented. I have never seen anything like it" Nicholas Walsh, AIU |
LAST MONTH THE US government was forced into a debt-for-equity swap on its bail-out loans to AIG, reducing outstanding balances on its $60 billion credit line by up to $26 billion in exchange for preferred shares in new holding companies for the troubled company’s US and foreign life insurance operations. AIG had been trying to sell these but could find no buyers as life insurance competitors around the world struggled with collapsing investment portfolios, earnings, share prices and market capitalizations.
AIG’s corporate restructuring, the largest and most complex ever attempted, will clearly take much longer than the US Treasury and the Federal Reserve naively hoped last autumn.
And a third new division is now being carved out. AIU Holdings will comprise AIG’s foreign general insurance businesses, commercial insurance and various other property and casualty insurance operations. It will be run by an executive management answerable to a separate board of directors and have its own brand identity.
