US insurance giant American International Group(AIG) failed on Monday to convince credit agencies of its financial well-being, forcing it into a race against the clock to find a multi-billion-dollar infusion to stay afloat. In blow after blow late Monday, the three main rating agencies, Standard & Poor's, Moody's and Fitch lowered AIG's credit score. They judge the solvency of AIG, the largest US insurer, with a global reach, at risk.
The Wall Street Journal reported Tuesday that people close to the situation say AIG may be forced into filing for bankruptcy if it cannot secure sufficient fresh funding by Wednesday. The situation is dire. AIG shares plummeted 61 per cent to 4.76 US dollars; they have lost 93 per cent of their value in a year. AIG alone has written down 25 billion US dollars amid spiking defaults on US mortgage payments in the United States.
After Wall Street investment bank Lehman Brothers filed for bankruptcy protection and peer Merrill Lynch was swallowed by Bank of America Monday, it looked like AIG may be the next domino to drop in the swiftly deteriorating US financial crisis. The US Treasury, as it had done for Lehman, ruled out using taxpayer money to prop up the insurer.
AIA is a subsidiary of American International Group (AIG). The Monetary Authority of Singapore (MAS) has urged AIA policyholders not to act hastily to terminate their insurance policies, as they may suffer losses from the premature termination and lose insurance protection.
Many Singaporeans are concerned that AIG could be the next financial giant to fall after Lehman Brothers as you can see queues formed outside AIA's offices on Tuesday, with clients seeking to end their policies despite having in mind that they will suffer losses. Some waited for up to three hours to be attended by staff who were overwhelmed by requests since the office opened on Tuesday morning.
MAS monitors the situation closely, and requires insurance companies in Singapore to manage their investment risks carefully.
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2 Comments:
my hubby also one of the singaporeans concerned about it.....he was insured with AIG
oh no.......i so worry!!!
Mi too was insured with AIA.
Although US Govt had injected fund into AIG, guess for the time being, they will be fine. But what set mi thinking was that US Govt had stress that they will not bill AIG, but no other banks or fund would like to take over it leaving US Govt no choies but to inject fund into AIG.
How many company can the Govt bill? It will just make them sink even further..
Although MAS said that AIA is not affected by AIG, but was mention in the news that AIG will pull back funds from their strongest market which is Asia. So more or less Singapore will be affected I guess.
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