Back from amazing Japan last week. And this week started with lots of commotion over
AIG &
AIA news. What an exciting month for me! =)
I have so much to blog, but I have to wake up at 730am
tmr!
Cailing gal, if you
are reading this! I'm very sorry to miss calling you on your birthday yesterday! Was busy with doing customer service (handling customers calls) and chatting with a
galfriend at home! So sorry! Will catch you soon to play okay!!! =)
I am actually not afraid at all with the recent
AIG news. If you ask me, I really think that it's only through tough times that you know how tough a person/company
is. Many people (Hundreds) queue to redeem
AIA policies yesterday without knowing what is happening. Just hearing rumours from friends and some news from the net/papers. But AIA is doing just fine EVEN WITH THESE PEOPLE SURRENDING THEIR POLICIES. AIA is very strong indeed. See that? If this happens to another company, it may not be able to take the risk. But AIA has more & above sufficient capital and reserves to meet all obligations. I have great faith in such a great company.
By the way, according to the Business Times "AIA policies a different animal from Lehman's Minibonds" by GENEVIEVE Cua, it states that AIA could well be the
most conservative of local insurers. What this means is that the
life fund (when we pay our premium mthly or yearly, these money goes into the life fund. All insurance companies have a life fund) that AIA holds are invested in very conservative instruments unlike other local insurance companies that invest more aggressive in equities markets. This is important because this life fund determines the future payout of bonuses and claims. We can't afford to lose life fund money and AIA is the most prudent local insurance company to do that.
(Check out MAS/LIA website if you are not convinced) Attached something to read on below. Full version at http://www.businesstimes.com.sg/sub/specialfocus/story/0,4574,297222,00.html?"On the issue of its stability and financial strength, AIA has more than enough capital to meet policy obligations. In an interview last October, AIA general manager Mark O'Dell told BT that its aim was to maintain a capital adequacy ratio above 200 per cent - 'which is well within the strongest band'. 'We're easily within the 230-240 per cent range,' he said then. The MAS's required minimum is well below that.
Of course, insurance funds are not shielded from market risk or loss. But AIA could well be the most conservative of local insurers. As at end-December last year, its participating fund was valued at $14.8 billion. Almost three-quarters of that is invested in fixed income securities. Only 10 per cent is in Singapore equities and 4 per cent in mutual funds and foreign equities.
As for policyholders who have put money into investment-linked AIA products (ILPs), there is even less of an issue in terms of the vulnerability of their assets to AIG Inc's problems. ILPs are effectively unit trusts where investors own the units and bear the market risk.
Of course, the asset values of those funds will reflect the mauling that global markets are currently enduring. But panicking and redeeming units at this time will only exacerbate the falls in the funds' asset values.
Insurance - particularly policies with substantial sums in protection value - is a long-term commitment where the decision to terminate should not be made lightly. This is because an individual in poor health may not be able to secure protection elsewhere.
What's more, the contracts are structured with long breakeven periods. So, early termination is usually done at a heavy loss.
AIA's policyholders should sit tight. This crisis is painful, but it will pass."Enough of AIA reassurance. Tough times don't last. Tough people (AIA) do!
Shall return with my Japan trip adventures!!! God bless! Praise the Lord!!! =)