by David Chaplin
He said AIG should have no problem selling its New Zealand assets if necessary.
The New Zealand AIG business has allegedly been on the market for some time.
“This is an orderly marketplace,” Lindsay said. “If AIG chooses to sell its New Zealand book there would be buyers and if it was forced to sell it [in the event of receivership] there would be buyers.”
According to the latest Investment Savings and Insurance Association statistics, as at June this year AIG has a 6.2% share of New Zealand’s traditional risk market with in-force annual premiums of about $92 million.
US media reports said AIG was last night trying to secure a US$40 billion bridging loan from the US Federal Reserve to give it time to engage in an orderly sell-down of some assets.
A Wall Street Journal (WSJ) report said AIG needed to quickly raise $40 billion or face a credit downgrade from Standard & Poors', which could push the insurance giant further into the red.
The WSJ story said AIG was considering selling off valuable assets including it airline leasing business, domestic car insurance firm and annuities book.
“AIG also considered shifting assets from its regulated insurance business to its holding company, which would help the holding company respond to demands for cash or collateral. But that plan was met with resistance from regulators and by late Sunday it appeared unlikely it would come together,” the WSJ report said.
AIG has reported losses of over US$18 billion over the last three quarters, chiefly due to its exposure to sub-prime loans and credit default swaps, with its share price slumping more than 80% in 12 months.
David Pierce, head of AIG NZ, was not available for comment.
The AIG news came on the same day that US investment bank Lehman Brothers filed for bankruptcy and Bank of America picked up brokerage firm Merrill Lynch for US$50 billion - half what it was valued at last year.
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