Laugh at First Sight

If your insurance company have just received USD 85 billion from the government, and in return, the government nationalized your company, what is the first thing you would do? Well -naturally - you would take your best sales reps to a resort, celebrate what a good year it has been so far and spend the better part of USD 400, 000।

That , at any rate, was apparently what American Insurance Group (AIG), an insurance company, was doing around last week. At this point let me declare a potential conflict of interest : I own an AIA Life Insurance policy, so I do have an interest in seeing the company is still around when my policy expires.

I am guessing there were plenty of glee around the table of business ethics wonks when news of this sales conference spread. They have a new set of ammunition when this morning it was reported AIG would receive an additional USD 35 billion. It is this correspondent's feverish hope that AIG would not be tempted to splash it on another junket trip (not even on a smaller resort, just because the new funds is less than the first injection).

Given the barrage of less than good news , it is quite likely that the AIG sales reps in the holiday resort will be joined by central bankers , ex employees of Lehman Brothers and the common people like you and me (though by this time - with all these people - the resort should be rather full)।

This turn of events is a big pity for the development of the insurance market for Indonesia. There are plenty of my fellow citizens who must be wishing they bought more handbags than insurance policies. But the reality is more and more people were gambling their future on insurance.

I remember a close friend of mine who is working on the sideline as an insurance agent. He laughed outloud when he knew how small my policy was. He immediately offered me a policy which would have meant I need to pay Rp. 3.5 million per month. Strangely enough I have never heard from him again since the last time we spoke , which was ,er, just before the crisis begin

I don't think he is still laughing at me now. But I also am not laughing either. On paper , I am not sure what is the return on my stock market-linked policy. But at least my portfolio is not all in insurance.

For all our sakes, this downturn had better be not too severe and not too long. However as we know we did not get to where we are overnight. Getting out won't be an overnight trip either, though spending it in a resort might ease the pain.