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American International Group (AIG) is holding onto its property/casualty division for a while. It originally planned to unload 20% of Chartis (formerly named AIU) via an initial public offering or through a private transaction involving institutional investors. But CEO Robert Benmosche is concerned that he'd be giving up the operating unit at discount prices. Selling cheap to repay the government won't benefit anybody – not even taxpayers – so he's waiting until an appropriate price can be fetched.
For now, Benmosche says he is focused on growing the Chartis operation, using a divesture later (at a higher price) to make good with the government. The plan is for AIG to operate Chartis in a manner similar to Berkshire Hathaway's (BRK.A) insurance units. The autonomy would position the company for an easy sale down the road, as it wouldn't have to be untangled from AIG.
AIG is currently in the process of unloading American International Assurance and American Life Insurance Co, its life insurance businesses in Asia. Former CEO Edward Liddy had planned to unload Chartis by the middle of 2010.
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Reader Comments (Page 1 of 1)
12-29-2009 @ 4:33PM
Allen said...
Just an observation: A year ago, AIG was bankrupt and in total disarray. Now, a year later, through the wonders of Obama and Benmosche, it is prosperous and everything is wonderful - as long as one is smoking crack cocaine, that is! AIG stock today is trading at around $30.00 per share - except that today's share is actually 1/20 of last year's share - so it is really only worth $1.50 per share. So, now we have an overpaid, underqualified CEO (Benmosche) and the Wizard of Oz (Obama) - and those who wrecked the company are still exactly where they were a year ago unscathed and untouched, because, after all, AIG is "too big to fail", although fail it did and continues to do. Perhaps the greatest risk of all is buying insurance from a failed insurance company!