AIG South Africa reports further profits

Peter Flint, President and CEO of AIG Africa

The AIG South Africa companies, which include AIG South Africa Limited and AIG Life South Africa Ltd, today reported a 1st quarter of 2009 profit of R60.5 million, up 61% from the same period in 2008.

AIG South Africa’s solvency ratio is 60% compared to a statutory requirement of 15% and its capital adequacy ratio (CAR) for AIG Life South Africa is 5.31 times compared to a minimum statutory requirement of 2 times.

Peter Flint, President and CEO of AIG Africa said: “Our businesses have delivered consistent and profitable results and remain well-capitalized, financially secure and under strong local regulation”.

AIG South Africa companies continue to operate as normal with retained AAA credit ratings from Fitch ratings for both companies and Global Credit Ratings for AIG South Africa only.

Last night in New York, American International Group Inc announced a 1st quarter loss for 2009 of $4.35bn; however AIG Inc.’s General Insurance business, which includes AIG South Africa Limited and AIG Life South Africa Limited, reported a strong operating income of $446 million for the same period.

At the same time, first quarter results for the AIU network of companies, of which the AIG South Africa companies are also a part of, reported that AIU generated an underwriting profit of US$298 million, a combined ratio of 90.3% and US$3.5 billion in net premiums.

Flint continued “We believe that these are a strong set of results and are a direct outcome of the underwriting discipline and operating principles that have made the AIG South Africa companies a trusted market leader in the property and casualty and general insurance industry. It bodes well for the AIU Holdings special purpose vehice (SPV) which will become one of the major global insurers in its own right.”

As was recently announced, AIU Holdings, which includes the AIU network of companies of which South Africa is a part, will be placed into a financially strong, highly profitable and independent special purpose vehicle to accelerate the separation of the profitable AIU businesses from the AIG Inc parent company.

In a recent Euromoney survey, AIU was named “2009 Top Insurance Provider in the World and AIG South Africa was named “Best Insurer”, “Best for innovation” and “Best Product Range.”

Flint concluded, “Our results lay foundation to my bullish approach to Africa where we continue to see opportunities and growth.