NAIROBI, Kenya, Mar 3 – AIG Kenya Insurance Company Limited has posted a 5% decline in net profit of Sh108 million for the year ending 2008, compared to Sh104 million in the same period the previous year.
This is despite its parent company AIG Inc getting a Sh12 trillion rescue cash injection from the US government to help them recover from a massive Sh4.93 trillion loss for its fourth quarter.
“For AIG in Kenya, it remains business as usual. We are in a strong financial position and continue to pay claims and underwrite new business. AIG Inc’s challenges in the United States are localised and, despite AIG Inc’s headline attention, are not impacting our operations here,” Japh Olende, Managing Director of the AIG Kenya Insurance Company Limited said.
“We remain tightly regulated and we are required by local law to maintain specific levels of solvency in order to maintain trading licences,” he said.
Meanwhile, AIG Inc while announcing its results declared a broad set of actions to improve AIG’s capital structure and enhance the value of its key businesses, as well as positioning these franchises as more independently run transparent companies.
“A new five year equity capital facility of Sh2.3 trillion ($30 billion), the repayment of the Federal Reserve credit facility of Sh2.09 trillion ($26 billion) via the transfer to the Federal Reserve of preferred interests in American Life Insurance Company and American International Assurance Company Ltd, and the transfer of securitisation notes up to Sh679 billion ($8.5 billion) of certain of its US life insurance businesses in return for a further reduction in the credit facility,” the statement read in part.
AIG Inc further stated intentions to form a General Insurance Holding Company, which included the Foreign General Insurance operations – also known as American International Underwriters (AIU) – incorporating AIG Kenya Insurance Company Ltd.
The newly formed entity will be called AIU Holdings Inc with a board of directors, management team and brand distinct, and separate from AIG Inc. AIU said its insurance operations grew by 10.3 percent for the year ended December 2008 despite prevailing market conditions, including a profit of Sh80billion at a combined ratio of 92.5 percent.