View this article online: https://www.insurancejournal.com/news/national/2009/03/02/98284.htm
American International Group, Inc. (AIG) today announced that it intends to form a General Insurance holding company, including its Commercial Insurance Group, Foreign General unit, and other property and casualty operations, to be called AIU Holdings, Inc.
The holding company is to have a board of directors, management team and brand distinct from AIG.
AIG CEO Edward Liddy gave no timeline but did say it would be done “as soon as practical.”
AIG said the move is to help prevent “franchise erosion” of the property/casualty business and to prepare for the potential sale of a minority stake in the business, which ultimately may include a public offering of shares, depending on market conditions.
The move is part of a deal worked out with the U.S. Treasury Department and the Federal Reserve Board for an additional $30 billion in taxpayer aid and a reworking of previous loan terms extended by the government.
Federal officials said the restructuring is designed to enhance the company’s capital and liquidity in order to facilitate the company’s global divestiture program.
“The company continues to face significant challenges, driven by the rapid deterioration in certain financial markets in the last two months of the year and continued turbulence in the markets generally. The additional resources will help stabilize the company, and in doing so help to stabilize the financial system,” said the Treasury and Federal Reserve in a joint statement.
When formed, AIU Holdings, Inc. will have more than 44,000 employees and 500 products and services serving 40 million commercial and individual customers in 130 countries and jurisdictions.
Kristian P. Moor, currently president and CEO, AIG Property Casualty Group, will be president of AIU Holdings, Inc. Nicholas C. Walsh, currently president and CEO, AIU, will be vice chairman of AIU Holdings, Inc. A chairman will be named at a later date.
John Q. Doyle, currently president and CEO, AIG Commercial Insurance, will assume additional responsibility for the domestic Personal Lines division.
“AIG is executing one of the most extensive corporate restructuring programs in history,” said Edward Liddy, chairman and chief executive officer, AIG. “The formation of AIU Holdings, Inc. will help protect and enhance the value of these key businesses, and position them for the future as more independently run, transparent companies.”