Obama tackles AIG anger during California trip

President Barack Obama pressed his case for an expensive budget and broad financial reforms on Wednesday while anger over bonuses paid at bailed-out insurance giant AIG threatened to overshadow his economic agenda.
During a campaign-style trip to California, a state that has been hard hit by the recession, Obama tried to defuse criticism about the AIG payouts and defend the government's bailout of struggling banks even as he tapped populist anger over the country's financial woes, reports Reuters in a Mar 18 posting from California.
"I know a lot of you are outraged about this -- rightfully so. I'm outraged too," he said of the $165 million in bonuses given top officials at American Insurance Group Inc, which accepted US$180 billion in government aid to keep it from going under. "I'll take responsibility. I'm the president," he told the cheering crowd of some 1,300. It's my job to make sure we fix these messes even if I don't make them."
Reuters reported that the firestorm over AIG and its business-as-usual bonuses threatens Obama's image as a crusader for change and could undermine his efforts to pull the economy out of a deep recession and pass his record US$3.5 trillion budget.
At a brief White House news conference before his trip, Obama expressed confidence in Treasury Secretary Timothy Geithner, who has come under harsh criticism over the bonuses, and his economic team, many of whom stood at his side.

AIG fine-tunes focus to maintain growth

By Isabele Francis
AIG General Insurance (Malaysia) Bhd (AIG Malaysia), which is eyeing takaful operations here, is hopeful of maintaining a 5% revenue growth in the current fiscal year by shifting focus to smaller outfits from bigger corporations, which are trimming their overheads.
Its CEO Rob Ryan told The Malaysian Reserve that AIG Malaysia will achieve a 5% revenue growth this year by changing its business mix.
Ryan also believes that the reorganisation of the company under AIU Holdings Inc will provide AIG Malaysia with stability and a definitive long-term direction.
The formation of AIU, announced on March 2, follows the bailout plan for Amer ican International Group Inc (AIG Inc), and is aimed at protecting and enhancing the value of the groupÆs general insurance businesses by separating them from AIG Inc. AIU will have a separate board of directors, management team and a brand that is distinct and independent from AIG Inc.
AIU Holdings will assist AIG Inc in preparing for the potential sale of a minority stake in the business.
"The bailout will not have any impact on AIG (Malaysia). However, this will mean that we will report to a different board of directors.
"As part of AIU Holdings, we will be part of a wellcapitalised business that will not be reliant on its parent AIGÆs agreement with the US government to support its financial strength," he added. He said his biggest challenge this year is to grow the business amid a difficult economic climate.
Ryan added that it is harder for a larger corporation to grow, especially those that are export-oriented.
"For example, these companies are likely to see fewer overseas trips. Historically, we donÆt have a big, small and medium enterprises portfolio.
"Insurance is not a luxury. It is good risk management and SMEs should see the value that we can offer," he said in a recent interview.
Meanwhile, on the company's takaful plans, Ryan said: "There is definitely demand for it in Malaysia. We hope to be in the race whenever Bank Negara Malaysia plans to issue more licences."
On the impact of lower interest rates on the local front, Ryan said although the insurer expects lower investment returns, the rates have no bearing on its underwriting businesses.
In the fiscal year 2008, AIG Malaysia posted a net profit of RM36.09 million. Gross premium written was RM494.68 million, and net premium written stood at RM349.89 million.
It posted a net loss incurred (NLI) of RM195.68 million, due to provisions. It also saw a jump in expenses due to starting up costs.
AIG Malaysia's profit margin is about 4% [CORRECTED]. For the year, AIG Malaysia has paid out RM189.99 million to policy holders. Its capital adequacy ratio is at 220% compared to Bank Negara Malaysia's minimum of 130%.
Its capital reserves stood at RM310.8 million and its cash and short-term deposits are in excess of RM220 million. The insurer's gross premium to date for the first quarter 2009 is RM31.4 million, up 4.7%. (This story appeared in The Malaysian Reserve on Mar 6, 2009)

AIG Asia unit to remains financially strong amid slowdown

American International Assurance Co, the Asian unit of American International Group Inc, said it remains "financially strong" even after an economic slowdown in the region weakened demand for insurance products, reports Bloomberg.
The AIA group had a combined solvency ratio of more than 200% of the regulatory requirement as of Nov 30, the company said in an emailed statement on March 5. Total assets are currently more than US$60 billion (RM223.65 billion), it said, without providing earlier figures, the report added.
Bloomberg added that AIG, which got its fourth government bailout this week after posting a US$61.7 billion quarterly loss, agreed to place AIA and American Life Insurance Co into trusts to pay down its federal credit line. The insurer last month put together all its AIA units in the Asia-Pacific region to form the AIA group.