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Saturday, September 27, 2008

AXA, AIG, and all the other A's

A number of people have asked me whether AXA is affected by "what happened to its mother company in the US." Apparently, these guys misconstrued AXA as AIG.  

These firms are really clever, using the letter A, intentionally or not, as the first letter of their corporate name or acronym, so that wherever there is an alphabetical listing, their name would be listed on top.  

For everyone to know: AXA is not AIG.  

And even if you have an AIG or PhilamLife investment, you should not worry too much. Being listed in the world's top corporations, AIG is not an entity that 
will just disappear just like that. PhilamLife, Philam Plans, Philam Insurance, Philam Asset Management, AIG-Philam Savings Bank and all the other businesses and funds handled by Philam are also separate entities from the AIG in the US. They remain safe and sound, just like the Philam we knew years and years ago, when these local units still didn't emphasize their relation to AIG.  

On the other hand, AXA is a global company whose headquarters is in Paris, France. Here in the Philippines, AXA partnered with Metrobank to bring life insurance and investment management products to Filipinos. AXA Philippines is no. 2 among life insurance companies in the country, based on premium income, next only to PhilamLife. For the variable life (with investment) category, AXA Philippines has consistently been no. 1 in the country, with a market share of close to 50%.  

The Global AXA Group is again no. 1 in Fortune 500's listing for the "insurance: life, health (stock)" category. It has consistently ranked either no. 1 or no. 2 globally throughout the past decade. Among the Fortune 500 companies, AXA is no. 15 among all companies worldwide, in terms of revenues. Others in the top 15 list include global oil companies and car manufacturers.  

BDO, Metrobank, RCBC, Sunlife and some other financial institutions have also been unjustly dragged to the recent Lehman Brothers trouble. Metrobank has gained the upper hand when it submitted to the courts its petitions for Philippine Investment One, Inc. and Philippine Investment Two, Inc. to be placed under corporate rehabilitation. The said companies are subsidiaries of Singaporean unit of Lehman Brothers.  

That was a proactive, preemptive move to protect Metrobank against possible dissipation of assets by foreign claimants. Even if the bank's indirect exposure to 
Lehman is relatively small as compared to its huge and diverse portfolio,
Metrobank made that move to ensure that the assets of both companies are properly preserved for the benefit of all the creditors if and when there is a need for a rehabilitation.  

It doesn't matter whether the economy or business environment is gloomy or bright. There will always be good times and tough times. That's a cycle. What matters is what you do, how you strategize and make decisions in different circumstances. Clearly, Metrobank displayed its knack in making decisions, not only for itself, but also for its depositors, investors, and for all the other local creditors who have interests in the Lehman units.  

AXA and Metrobank remain to be the leaders in their respective industries, and there is nothing to worry about, despite of some noise that is hovering around the banking, investment and insurance industries.

[Note: The above article is an independent analysis/insight by the Investment Advisor, and is NOT an official statement from AXA, Metrobank, or any of the financial institutions mentioned.]  

Dexter C. Lim, MBA 
Investment Advisor - AXA Philippines 
Analyst - Bayan Telecommunications

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