Following the recent announcement of record fourth quarter losses of $61.7b by AIG, I felt it important to update you on our current advice to all our clients who hold policies with that provider.
The US Department of Treasury and The Federal Reserve are working with AIG on a restructure package and review of financial arrangements that guarantee further injection of capital to bolster its balance sheet and improve liquidity.
At the same time, certain profitable sections of the company may be sold off to help repay debt to the US Government. Its intention is to protect the value of these businesses and prepare them for more independence from other more distressed parts of the company.
Within the restructuring plans, a General Insurance holding company will be formed. This encompasses both the US and UK based general insurance operations. This new operation will be called AIU Holdings and AIG UK will form a part of AIU Holdings Inc. Standard & Poor have reaffirmed it’s A rating.
AIU continues to perform strongly reporting 4th Quarter results of:
- Net premiums having growing by 10.3% to $14.4bn
- An underwriting profit of $1bn
- Capitalisation of over $5bn cash and short term investments
Download the very latest AIG UK Limited results.
Although Oval believe this to be a positive move, we remain committed to monitoring the position with continued focus on behalf of our clients.
AIU meet Oval’s market security guidelines, and we will continue to provide terms on your policies where we believe these to be in your best interest. We are happy to discuss any concerns or queries you may have regarding AIU’s financial situation and to provide alternative quotations where required. As the situation develops, I will ensure you are kept up to date.
Should you wish to discuss this further, please do not hesitate to contact me directly. In the meantime, your account team will be in regular contact regarding your policy renewal.
Yours sincerely
Jeff Herdman
Group Managing Director