Frequently Asked Questions (FAQs) on recent developments
Thank you for your continued business. The financial challenges mentioned in the news about AIG are on a national level, while AIG Hawaii remains financially sound and will continue to provide quality products and services to Hawaii customers.
We are monitoring the AIG national situation very closely and are committed to communicating with our customers, business partners and community as we learn more.
Here are some questions that we recently received from our customers and our answers to address them.
- Who is AIG?
- What is the nature of AIG's financial issues?
- How is AIG going to overcome the issues?
- Who is AIG Hawaii Family of Companies?
- How large is AIG's presence in Hawaii?
- Is AIG Hawaii financially sound?
- How does the AIG situation affect AIG Hawaii?
- Why was AIG Hawaii chosen for sale?
- What does this all mean for AIG Hawaii?
- Is my policy safe at AIG Hawaii?
- Will AIG Hawaii still pay my claims?
- Why should I renew my AIG Hawaii policy?
- If I pay my renewal in full, are you going to cover me for the whole six months?
American International Group (AIG) is a holding company that owns 71 U.S. based insurance companies, including AIG Hawaii and American Pacific Insurance Company. The holding company also owns banks, securities firms, and non U.S. based insurers, along with other related businesses.
The insurance entities belonging to AIG are not the issue. They are all financially strong and well-capitalized. The challenges lie with AIG's financial holding company. It took on more risk than it could handle when investing in collateralized debt instruments, such as credit derivative swaps on mortgage-backed securities. When the U.S. housing markets experienced a downturn, these risky investments lost a lot of money for the AIG holding company.
On September 16, 2008, AIG received a loan from the Federal Reserve Bank to borrow up to $85 billion. The government did not give the money to AIG; it is not a "bailout;" it is a loan. The loan takes the form of a revolving credit facility similar to a charge card and must be repaid within 24 months. This loan will help AIG meet its financial services obligations. In order to repay the loan, AIG expects to sell certain subsidiaries and assets. The Federal Reserve Bank has subsequently provided an additional $37.8 billion loan to AIG, backed by investment grade securities as collateral.
On November 10, the U.S. Treasury, the Federal Reserve and AIG restructured the financial agreement. The restructured agreement helps to ensure the long-term success of AIG and give the company the best chance for stability and success. You can read the details of the agreement by clicking here. AIG Hawaii remains financially sound and will continue to provide quality products and services to Hawaii customers.
AIG Hawaii Family of Companies has been in Hawaii since 1955. Hawaii Insurance Consultants, Ltd. (HIC) was established as a general agency and consultants for the members of the ILWU in Hawaii. Over the 50+ years, HIC has developed into an all-lines insurance agency. In 1980, HIC became a wholly-owned subsidiary of AIG. In 1987, AIG Hawaii was licensed and approved by the State and began writing auto insurance in 1988 through its sister company and general agency HIC. So the AIG Hawaii Family of Companies has been in Hawaii for over 50 years, and we have more than 300 local employees on five islands to serve Hawaii consumers.
AIG Family of Companies is the largest property and casualty insurer in Hawaii, with close to 11% of the market. It has 13.5% of the auto insurance market and over 18% of the workers compensation market. AIG Hawaii and all of its insurance subsidiaries are regulated by the Insurance Division of the State of Hawaii Department of Commerce and Consumer Affairs.
AIG Hawaii is financially stable and all of our policies are safe and secure. The value of AIG Hawaii's assets exceeds its liabilities. We have the funds available to pay all valid claims. AIG Hawaii is regulated by the Insurance Division of the State of Hawaii Department of Commerce and Consumer Affairs. State law protects the assets of AIG Hawaii. These assets are there to back up each policy and cannot be taken from policyholders.
AIG Hawaii, part of the AIG Personal Auto Group, is an asset of the AIG holding company. The holding company is selling assets to repay the Federal Reserve loan. It was announced at the conference call to investors on October 3, 2008, that the AIG Personal Auto Group is on the list of assets for sale. This does not necessarily mean that the company will be sold, or a buyer has been identified. So it is business as usual at AIG Hawaii, and you can continue to expect the same quality service and products.
The AIG Personal Auto Group is an attractive and marketable asset. This is why we are on the list of assets available for sale. AIG Hawaii is a highly successful company within the AIG Personal Auto Group. Because of our strong financial standing, we have been included for sale to contribute to the turnaround of the AIG holding company.
We see this as a growth opportunity, as we know the potential buyer will be a financially strong entity. Just as when AIG acquired Hawaii Insurance Consultants in the early 1980s, which allowed us to grow by leaps and bounds, we are looking forward to the same with the potential buyer. If we are not sold, we will be a part of a smaller but stronger AIG as it emerges from its financial issues, giving us the opportunity for profitable growth. Either way, AIG Hawaii will remain a strong company and we will continue to provide the same quality service and products to our Hawaii customers.
All AIG Hawaii policies are safe and secure. We have the funds available to pay all valid claims and issue new policies. Superior customer service remains our top priority. We have more than 300 local employees here to serve you and meet your needs.
AIG Hawaii remains committed to, and capable of, serving the needs of our customers in Hawaii. Additionally, state law protects the assets of AIG Hawaii. These assets are there to back up each policy and cannot be taken from policyholders.
If you have any questions regarding your policy, please call 544-3920 on Oahu, or toll-free at 1-800-272-5208 from the Neighbor Islands.
AIG Hawaii continues to provide prompt and efficient claims services on all valid claims. Our claims-paying ability has not changed, and we have more than sufficient resources to pay for all claims obligations. We continue to offer our Instant Claims Payment service and convenient drive-in locations for claims appraisals.
If you have any questions regarding claims, please call 544-3999 on Oahu, or toll-free at 1-800-413-1711 from the Neighbor Islands.
AIG Hawaii Family of Companies has been in Hawaii for over 50 years. We remain committed to, and capable of, serving the needs of our customers. AIG Hawaii insurance policies are financially safe and secure. All policies are protected and valid claims obligations will be paid.
As an AIG Hawaii customer, you can continue to enjoy local servicing by local AIG Hawaii employees. By renewing your AIG Hawaii auto insurance policy, you will keep and continue to accrue benefits based on length of time as an AIG customer, such as Safe Driving Discount and Earned Deductible Credit.
Yes, AIG Hawaii will provide coverage for the whole six months. AIG Hawaii will continue to honor all commitments to our customers.
For more information, please visit www.aighawaii.com, under AIG Hawaii News Updates.