AIG moves to separate the property and casualty business

 

Wednesday, Apr 22,2009, 6:00:48 PM   Click:

American International Group Inc. said Tuesday it is moving towards the sale of a minority stake in insurance companies ISOCARP Holdings.

AIG, once the largest insurer in the world, is the transfer Holdings ISOCARP to a special purpose vehicle (SPV) for the potential sale of part of the company, which include a stock offering in May.

The company announced March 2 that Embattled spin off AIU Holdings and give the company its own board of directors, management team and brand separate from AIG, which has been tarnished by an executive bonus scandal, massive losses and the receipt of over $ 180 billion in federal bailout funds.

AIU Holdings is the holding company of AIG commercial insurance, general insurance units, and private client group.

"Getting ISOCARP SPV Holdings marks the latest milestone in our strong position of insurance companies as independent companies, which will benefit all stakeholders," said Edward Liddy, AIG president and CEO, in a statement.

AIG AIU Holdings will own funds in an ad hoc basis, in exchange for preferred shares and common interests. AIG also plans to buy stakes of IAU Holdings International Lease Finance Corp., United Guaranty Corp., Inc. and Transatlantic Holdings, other unbundling casualty of AIG and its other subsidiaries.

The Federal Reserve Bank of New York said that the move is a milestone in the company's efforts "for the main sectors in the best position to optimize their operations and maximize their value."

"It is in the best interest of American taxpayers, the company and its customers and employees that these efforts succeed," the Fed said in the statement.

AIU Holdings has over 44,000 employees and 500 products and services serving 40 million individual and business customers in 130 countries. Companies in AIU Holdings had approximately 43 billion in equity at 31 December 2008, according to AIG.