Thursday, March 19, 2009

AIG - The Local Business

Last week Adolf posted on the sorry saga that is AIG.

Zen Tiger has another perspective over at NZ Conservative.

Adolf looks back with amusement at the expensive PR exercise mounted two years ago to re brand the then AIA business. They renamed it AIG. Paid consultants a fortune for the job and patted themselves on the back now that they could piggy back off the good name and reputation of AIG. How the mighty have fallen.

Now you know why in the Life industry, those who have been around for a while will tell you 'big is not best.'

Readers might be interested to hear what the local 'industry' rumour mill is saying:-

Contrary to comments on certain blogs, there is no indication of an AIG internal policy to unreasonably reject claims.

The Australasian businesses are up for sale but nobody is prepared to pay the asking price.

There has been a shake up in underwriting with reinsurers raising their eyebrows at some recent past practice.

AIG's new business has tanked. They are taking a pounding.

Adolf would be very interested to hear from policy holders who do feel genuinely aggrieved.

There are a number of avenues for redress. (TVNZ's Fair Go programme is at the very bottom of the list.)


Simon said...

Forget AIG America is utterly gone. Beginning of the end.

NZ dollar to buy 4 American Obama backed pesos in about 2010/ 2011.

pdm said...

As an adviser/broker I wonder where the local AIG business is heading. While I don't have a big `book' with them I do have some reasonably sized Life. Critical Care and I/P clients there.

At this stage I watch and wait and do not place new business there.

Diane said...

We have about $12,000 with AIG NZ. Not a lot in the scheme of things - but it's ours, and we'll want it back.

pdm said...

Is that premium Diane or Renewal Commission?

Diane said...

I don't understand the question, pdm.

We took out a policy a few years ago and now we could surrender it for the cash value if we want. I think I would rather have the money and lose a few benefits than leave it and possibly lose the lot.

Adolf Fiinkensein said...

Diane, I was unaware AIA latterly AIG sold this type of policy. Never too late to learn something new.

You should seek advice from your own insurance adviser. If you don't have one, send pdm or Adolf an e-mail and one of us will have a look at it for you. I doubt your cash value will be at serious risk but the chances of the policy enjoying a fruitful return in the next few years may be considerably diminished. There are many factors you need to consider and the cash value is only one of them.

pdm said...

Agreed Adolf and happy to help Diane if she wants to contact me via you perhaps.

As far as I am awae the on/y AIG (AIA) policy with any cash back is their Permanent Term which has a premium payback component.

PhilBest said...

Essential reading: Wall Street Journal

"The Real AIG Outrage"

"Obama's AIG Panic"

Diane said...

Thanks Adolf and pdm for your kind offers of help.
We took the policy with Alico (American Life Insurance Co)so I guess it is a Life Insurance policy of some sort. It was over $1000 premium a year and we had to stop contributing because we couldn't afford it, but the money we had contributed just carries on compounding interest. It is a policy with guaranteed 6% tax-paid interest so as long as the company is solvent I guess it makes sense for us to leave it there.

pdm said...

Gosh that is an old policy Diane I haven't run across the ALICO name for years and must confess to not knowing that AIG had taken them over.

A consolation is that your money won't be (or should not be) invested directly into AIG. Depending on the structure of your policy it will be invested in a mix of Fixed Interest, Property and Share Investments both within NZ and Internationally. AIG will only be facilitating the management so I would be very surprised if your money wasn't completely safe.

However it will be fluctuating due to market movements and may have lost a little value over the last 18 months or so. Having said that it is only a loss if you pull the funds out.

As Adolf said see an adviser. Adolf is in Auckland and I am in Hawkes Bay and either of us can probably recommend someone if you are in another part of the country.