"Future, how are you," the latest marketing slogan from the China division of American International Assurance, which began yesterday, may ironically be the worst time to remind people of the insurer's future as parent American International Group hopes to escape the same fate that has befallen Wall Street giant Lehman Brothers.
New York-based AIG, the world's biggest insurer, is struggling to find a financial lifeline that would prevent it from becoming the next victim in the subprime mortgage debacle which triggered the financial crisis.
While AIA China has launched the campaign to encourage policyholders to prepare more for their future with retirement plans, some are concerned whether they need to redeem their policy to avoid future losses.
AIA China shrugged off the worries by saying yesterday that its domestic business is running smoothly and on track despite the financial turmoil enveloping its parent.
"The problems in the US market won't cast shadow on the China division," an AIA China corporate communications manager told Shanghai Daily. "AIA maintained separate insurance funds for polices issued here (China)," she said. "The subprime losses that AIG faces have no impact on policyholders in China."
AIA agents also echoed a similar response to policyholders who inquired about the state of their policies.
The worries are not confined to the China market. Hundreds of anxious investors thronged the Singapore office of a unit of AIG to redeem their policies yesterday on fears the insurance giant could be the next big casualty, Reuters reported yesterday.
AIA is one of the first overseas life insurers to tap the Chinese market. Its premiums topped 8.9 billion yuan (US$1.03 billion) last year, ranking it the biggest overseas life insurer in China, according to statistics from the China Insurance Regulatory Commission.
The regulator yesterday said the recently inaugurated insurance capital protection fund management company will manage the money to protect policyholders from losses when insurers go bankrupt. It also posted rules regulating the insurance protection fund, which were issued jointly with the Ministry of Finance and the central bank.
Once an insurer files for bankruptcy, policyholders can claim back all their losses from the protection fund if they are less than 50,000 yuan (US$7,308).
For individuals whose losses are above 50,000 yuan, they can claim back 90 percent of the amount over that.
The Chinese mainland subsidiary of AIU, which is the property and casualty unit of AIG, was not available for comment yesterday on its parent's impact on the business on the mainland.
(Shanghai Daily September 17, 2008)
