AIG's New Zealand businesses say they are well-placed to handle any cash-flow challenges despite the financial turmoil being faced by the US parent company.
Insurer American International Group has been fighting to stay afloat for several days in the wake of the collapse of investment bank Lehman Brothersand the takeover of Merrill Lynch.
In New Zealand it owns two separate businesses, AIG Life, New Zealand's fifth largest life insurance company with a market share of 6.2 per cent, and AIG New Zealand, which covers general insurance and is around the ninth largest, with a market share of 8 per cent.
A statement released by AIG Life from its parent in Hong Kong yesterday described the developments in the financial markets in the past few days as "truly extraordinary".
The company admitted it faced short-term liquidity pressures but said it had a "strong, well-positioned business" and a "deep asset base" in which to rely on.
"The insurance policies written by AIG companies are direct obligations of our regulated insurance companies around the world. These companies continue to operate in the normal course to meet obligations to our policyholders."
AIG New Zealand, which is overseen by AIG Australia under the the Foreign General insurance arm of the company, said AIG's challenges did not impact on its segment's capital positions.
"The liquidity of the Foreign General segment remains very strong.
"More than 50 per cent of the Foreign General segment's assets are composed of fixed maturity instruments and cash which total $26 billion."
Vance Arkinstall, chief executive of the investment savings and insurance association of which AIG Life is a member, said it didn't appear as though there were any clear ramifications for the New Zealand business.
Arkinstall said even if there were cash-flow problems here the New Zealand company would likely not have to dig into its own pockets to cover the full amount because a large number of insurance policies would also have re-insurance with international companies.
