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Home Insurance Planning General Insurance Insurance Relief for Motorists

Insurance Relief for Motorists

Thursday, 18 March 2010 08:00 Ginny Lim
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Finally, motorist can expect either no or marginal increase in the car insurance premium this year. General Insurance Association of SIngapore (GIA) announced on 17 Mar 2010 that the industry losses narrowed sharply from $214 million in 2008 to $44.5 million last year . This is probably due to higher premium collected last year and the positive result from the New Motor Claims Framework introduced  in June 2008. The framework requires motorists to report accidents - even minor ones - within 24 hours, and to supplement these reports with photographs.

 

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Newsflash

Prudential Buy AIA for S$50b, 05 Mar 2010

Prudential has just confirmed that it intends to pay US$35.5 billlion (S$50billion) to buy American International Assurance (AIA), the Asian life insurance arm of American International Group (AIG).

This deal will help AIG to pay back some of its US$182.5 billion debt to the US government. Prudential will pay US$25 billion in cash and US$10.5 billion in stocks and other securities for AIA. Prudential will raise the cash of US$25 billion by selling US$20 billion worth of shares and another US$5 billion by selling bonds. AIG accepted Prudential’s offer since the price offered is much better than the initial public offering of AIA in Hong Kong which could raise for about US$15 billion. Together with the earlier purchase of UOB Life Assurance (now named Prudential Life Assurance) from UOB for $428 million, Prudential will becomes the largest life insurer in Singapore, Hong Kong, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.

There are likely to have some repercussion from this take-over. There may be job losses due to duplicate functions such as Finance and Human Resource. However, the combined sales force of 7,800 will not be affected. Prudential share price tumbles by almost 20% in just two days in March 2010, amid concern over the price of the deal. Prudential is currently valued at about S$25.8 billion. With the rights issue to be offered, there will be mass dilution to the current share price. AIA policyholders should not be too concerned on their policy contracts since Prudential is obligated to honour the original contracts.