AIA Thailand unit to 'remain unchanged'

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AIA Thailand unit to 'remain unchanged' 
The Nation: 3 Mar 2010
AIA's Thai unit 'unaffected by takeover'
By Achara Pongvutitham
The Nation
Published on March 3, 2010

Prudential to set up holding company for Asian management

Despite the sale of the American International Assurance Group in Asia to British insurance giant Prudential, operation of AIA's life-insurance business in 15 countries - including Thailand - will remain unchanged.

Each unit will remain committed to continuing operations under their own strategies and offering their own services.

However, a company called New Prudential Holding will be set up for overall management of the operations of both Prudential and the AIA Group in Asia. The new company and its management structure are expected to be in place within six months.

A source at AIA (Thailand) said the company had held an urgent board meeting yesterday in Bangkok to explain details of the merger to management.

The source said AIA would continue to operate and manage the company as previously planned, as it would be separate from Prudential's own operations. However, the operating results and management of both companies will be directly reported to New Prudential Holding.

"The deal has not created a co-management or co-marketing strategy practice, but has been drawn up to boost the overall customer base in the region. It is a synergy deal to strengthen the competitiveness of the two companies," said the source, adding that nothing had changed under the deal and that AIA would still service policyholders as normal.

AIA in the US on Monday announced an agreement for the sale of the group - one of the world's largest pan-Asian life-insurance companies - to Prudential.

The deal is worth US$35.5 billion (Bt1.16 trillion), comprising $25 billion in cash, $8.5 billion in the face value of equity and equity-linked securities and $2 billion in the face value of Prudential's preferred stock.

The transaction includes all of the companies of the AIA Group operating in 15 countries across the Asia-Pacific, including its international network of more than 320,000 agents and 23,500 employees serving the holders of more than 23 million in-force policies and more than 10 million participating members of its clients for group life, medical, credit life coverage and pension products.

"Both of us [AIG and Prudential] are committed to preserving the AIA brand and the unique strengths of each of our sales forces, which is key to capitalising on AIA's long-term potential," AIG president and chief executive Bob Benmos-che said in a press release on Monday.

The source said the transaction would create win-win benefits for the two companies to expand their customer base.

AIA currently controls the lion's share of the insurance market in China, Hong Kong, Singapore, the Philippines and Thailand, while Prudential holds the majority share in India, Indonesia, Malaysia and Vietnam.