Insurers calm shareholders

By Phil Boeyen, ShareChat Business News Editor

Thursday 13th September 2001

AMP (NZSE: AMP) has told the market that there will be no profit or loss impact for insurance subsidiary GIO's discontinued reinsurance business following the plane attacks in the US.

AMP says GIO ceased reinsurance underwriting in 1999 and has only very minor residual US property risks, with aggregate exposure of less than US $10 million.

AMP does not operate a life or general insurance business in the US.

Meanwhile Tower Group (NZSE: TWR) has advised investors to remain calm in the wake of the US events.

MD, James Boonzaier, says the company has discussed the situation with its international managers, who report their operations have not been directly impacted by this event and will continue to operate.

"The impact on the global sharemarkets, especially the US market is tracking as negatively as expected. From a practical viewpoint, the closure of the US exchanges means that unit prices cannot be struck and because of this, transaction cannot be made at present."

Mr Boonzaier says Tower has suspended investments, switches and redemption in all funds affected by international assets for the time being.

"We expect this to be so for a few days until there is a clearer picture of developments. Transactions and funds relating to New Zealand assets or those of Tower's funds which are not impacted by these tragic events will remain open for processing."

Mr Boonzaier says investors should be aware that additional market volatility can be expected for a period but clients and investors should not rush into any "knee jerk" drastic action.

"A steady approach is called for by institutions and investors."

The US markets could be open as soon as Friday.

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