AIG faces three-way split: reports
International media reports say AIG is in talks with US authorities to discuss a possible restructure of the company that could see it split into three divisions to stay afloat.
The US insurance giant is due to post fourth-quarter earnings, with losses expected to reach as much as $US60 billion ($92.8 billion). The insurer is reported to be seeking additional government funding.
Last week the Financial Times reported the US Government may take control of the three divisions, leading to the end of AIG’s 90-year run as an independent global insurer.
Under the plan, the Government would trade its 80% stake in the business for large stakes in AIG’s Asian operations, the international life business and the US personal lines division.
In return, authorities would loosen or even forgive terms of a new $US60 billion ($92.8 billion) five-year loan. The group is already $US150 billion ($236 billion) in hock to the Government. AIG would remain as the holding company but its future would be less than certain if the Government then chooses to sell the divisions later – as would seem highly likely.
US media reports claim brokers and their clients are losing patience with the insurer as losses mount as it attempts to shape a leaner future.
Read more in ANALYSIS.
The US insurance giant is due to post fourth-quarter earnings, with losses expected to reach as much as $US60 billion ($92.8 billion). The insurer is reported to be seeking additional government funding.
Last week the Financial Times reported the US Government may take control of the three divisions, leading to the end of AIG’s 90-year run as an independent global insurer.
Under the plan, the Government would trade its 80% stake in the business for large stakes in AIG’s Asian operations, the international life business and the US personal lines division.
In return, authorities would loosen or even forgive terms of a new $US60 billion ($92.8 billion) five-year loan. The group is already $US150 billion ($236 billion) in hock to the Government. AIG would remain as the holding company but its future would be less than certain if the Government then chooses to sell the divisions later – as would seem highly likely.
US media reports claim brokers and their clients are losing patience with the insurer as losses mount as it attempts to shape a leaner future.
Read more in ANALYSIS.