AIG to focus on p&c business moving forward

American International Group Inc. (AIG) intends to retain its foreign general insurance businesses, its U.S. property and casualty businesses and to retain a continuing ownership interest in its foreign life insurance operations.
“Literally, everything else that does not fit that definition, we are considering for sale,” Edward Liddy, AIG’s chairman and CEO, said in a Webinar on Oct. 3. Business units on the block include AIG’s personal lines business, excluding its Private Client Group.
The company hopes to sell off as many of its remaining assets as one large package as possible, Liddy continued. “We will tilt our process towards larger transactions, but will calibrate them to maximize value,” he added.
“We have a preference towards larger transactions because they can be done with speed and that will help to keep our policyholders comforted.”
He admitted there might be some subsectors of the various businesses that will be disaggregated in order to maximize value. “But larger is better Trying to get the ball right down the middle of those things [maximizing value and a swift, large transaction] is what we’re trying to do.”
AIG’s insurance businesses, its regulated entities are strong and well-capitalized, he reiterated. Its policyholders are secure. “Our challenge rests with the liquidity issues in our financial products businesses and securities lending,” Liddy said.
“A strong viable and nimble AIG will emerge from this crisis.”
Of the US$80 billion lifeline given by the Federal Reserves, there is currently a US$61 billion balance on the loan, he noted.
According to the MSA/Baron Outlook Report for the Q2-2008, AIG’s main non-life operations in Canada include:
American Home Assurance Company (Canadian Branch) 2007 net income of Cdn$136.7 million;
Transatlantic Re (Canadian Branch) 2007 net income of Cdn$30.44 million;
Commerce & Industry Insurance Company of Canada 2007 net income of Cdn$24.59 million;
The Boiler Inspection and Insurance Co. of Canada 2007 net income of Cdn$19.7 million; and
AIG United Guaranty Mortgage Insurance Company Canada 2007 net loss of Cdn$2.2 million.