Sunday, September 21, 2008

The Stock Market Crash of AIG Insurance

This article discusses the stock market crash of AIG insurance and how the Federal Reserve bailed them out at the last minute with an 85 billion dollar loan. In exchange for this assistance the state now owns 79.9% of its shares. The main reason the Federal Reserve stepped in and helped with this crisis was because it was agreed that if AIG failed it would cause too much chaos and disorder in the global financial market.

AIG is one of the largest industries in Canada. Canadian life insurance policy holders with AIG have always felt safe with the knowledge that their future was in the hands of the world’s second largest life insurance company but now things have took a major turn and changes are being made fast. The company is expected to sell off its assets during the next two years to repay the loan. So what does this crisis mean for Canadian life insurance policy holders now?

Naturally, most of the policy holders are afraid and worried about what the outcome will be for them. Many are calling to ask questions and trying to find out all they can and others are even turning to competitors to see what option they are offering. However, to put everyone’s mind at ease the head of the AIG Life Insurance Company in Canada set out to reassure their life insurance policy holders that everything possible was being done to improve the financial performance of AIG and to secure the business. Basically, officials are saying it’s no need to worry because all obligations to policy holders will be honored.

Even with this reassurance many stock markets continued to suffer as shares began to drop. The Sun Life Financial Inc of Canada fell 8% and the Manulife fell 6% and this is just an example of how this crisis is affecting the world.


Post a Comment

<< Home