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The US government's US$85-billion (Bt2.9-trillion) rescue of American International Group will likely lead

a restructuring plan involving the sale of AIG's life-insurance businesses in both the United States and Asia.

In Asia, AIG's life-insurance unit, American International Assurance, could be put up for sale, according to US-based analysts.

AIA operates in several Asian markets. It has more than 4.8 million policyholders in Thailand, where it has combined assets in excess of Bt380 billion and reserve capital of Bt271 billion.

Elsewhere, the insurance giant has operations in China, Japan, Hong Kong, Taiwan, South Korea, Malaysia, Indonesia, the Philippines, India, Vietnam, Australia and New Zealand.

US analysts said Washington's rescue plan for AIG did not represent a complete solution to the financial problems currently facing the group, which has been on the brink of insolvency due to the downgrade of its credit ratings following the sub-prime crisis.

As a result, regulators of the insurance industry in Asia hope

to see the massive amount of

policyholders' money in safer

hands.

"It's like a bank run: we currently see little risk to policyholders' money at AIA," said an analyst.

However, thousands of AIA policyholders across the region earlier enquired about ending their policies for fear of bankruptcy.

Strong domestic players such as China Life, Samsung Life in South Korea, HSBC/Hang Seng Life in Hong Kong and Cathay Life in Taiwan are expected to benefit from the trouble facing AIA.

Stronger players in the region will likely see faster new-business

premium growth as consumers

turn to healthier insurers.

"China Life has the strongest balance sheet in the region.

With a solvency margin at over 300 per cent in the first quarter of this year and premium income of more than 112 billion yuan [Bt559.9 billion], the insurance group is in a very solid position to consider domestic and overseas acquisitions. It can also invest on a stand-alone basis or with partners," said the analyst.

The situation will provide an opportunity for regional players to establish themselves as global financial companies.

Potential buyers of the AIG business will likely be those with a strong balance sheet and a large amount of excess capital, plus good credit ratings.

Those with strong balance sheets include Manulife Life, China Life and Ping An.