Saturday November 8, 2008

AIG may sell personal lines business

NEW YORK: Struggling insurance conglomerate American International Group Inc is expected to reach deals to sell its US personal lines unit and an equipment insurer by the year end, a source said.

New York-based AIG is expected to clinch a deal soon to sell its US personal lines business, which one analyst has valued at between US$5bil to US$7bil.

It was also close to selling a smaller business, Hartford Steam Boiler Inspection and Insurance Co, the source said.

The sales are the first sign that AIG chief executive Edward Liddy is progressing with his plans to sell off a large part of its business to repay a massive government loan.

AIG is not expected to announce any deals when it reports its third-quarter results on Monday. The insurer is widely expected to post its fourth consecutive quarterly loss, hurt once more by writedowns on credit derivatives linked to subprime mortgages. — Reuters

On Oct 3, the insurer said it planned to keep its US property-casualty, foreign general insurance businesses and an ownership interest in its foreign life operations but sell the remainder. So far, no deals have been announced.

AIG is selling off the business as part of an ambitious restructuring it has had to undertake to pay off an US$85bil government loan.

The company’s US personal lines business sells motor insurance, and products to high net-worth individuals through its AIG Private Client division. The division has annual policy sales of about US$5bil, with motor policies accounting for 80% of premiums written. — Reuters

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