AIA Shanghai Receives Application for Policy Cancellation

SHANGHAI, Oct 01, 2008 (SinoCast China Financial Watch via COMTEX) -- AIG | Quote | Chart | News | PowerRating -- American International Assurance (Shanghai), a China operation of the U.S. insurance giant American International Group, received some applications for cancellation of policies in the past few days.

The similar situations occurred to AIA (Hong Kong) and AIA (Singapore) earlier, when news that the US government would put billions of dollars to bail out its parent company. Some AIA policy holders are concerned that AIG, one of the world's largest insurance groups, may be the next to collapse after Lehman Brothers, although it assured that the company has sufficient capital to meet its obligations to policyholders.

Some customers of AIA (Shanghai) went to AIA's China headquarters and AIA (Shanghai) office to terminate their insurance policies.

A woman who has been paying CNY 1,000 every year for a life insurance policy for 13 years and got a refund of CNY 3000 every five years was eager to cancel the policy because she is worried about the outlook of AIG.

Massive policy cancellation has yet to occurred to AIA's seven branches in Shanghai, Guangzhou, Beijing, Jiangsu, Shenzhen, Jiangmen and Dongguan.

AIA made a statement on September 16 that the group's life insurance, general insurance and retirement services businesses, including its extensive Asian operations, continue to operate normally and remain adequately capitalized and fully capable of meeting their obligations to policyholders.

Some other insurance companies in Shanghai are taking the opportunity to sell their products to the customers of AIA.

Some analysts advised AIA policyholders not to act in a hurry to cancel their insurance policies as they would probably suffer losses from the premature termination and lose insurance coverage.

At present international players such as Munich Re, Warren Buffett, Allianz and AIG's ex-CEO Greenberg are battling to acquire AIG's overseas operations when the US insurance giant is put under huge liquidity pressure on the aftershock of US subprime lending crisis.

A senior insurance analyst proposes Chinese financial institutions shall participate in the battle, otherwise, it would be a great pity. The analyst predicts that AIG would sell its Asian operations sooner or later.

New York-based AIA was the first foreign insurer entering mainland China with approved license in 1992, when it set up AIA Shanghai branch. It has expanded the business into Beijing, Guangdong, Jiangsu and Shenzhen.

(USD 1 = CNY 6.84)

From www.dayoo.com, Page 1, Sunday, September 28, 2008 info@SinoCast.com

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