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American International Group Inc. is in advanced talks with one potential buyer for part of its U.S. personal lines business as the insurer looks to sell assets to pay off a massive government loan, Chief Executive Edward Liddy said in an interview Friday.
AIG contemplated giving investors a laundry list of units to be sold but decided it was better to say what would be retained, Liddy told Reuters.
Earlier Friday, the insurer, which has been crippled by losses on bad mortgage bets, announced details of a plan to pay off up to $85 billion of U.S. government loans.
It plans to retain its U.S. property and casualty, and foreign general insurance businesses, and keep an ownership interest in its foreign life insurance operations.
Liddy declined to say how quickly he expects any deals to be signed.
“I want to balance speed with value,” he said. “We have a number of buyers interested.”
Liddy said some of AIG’s smaller businesses, such as Hartford Steam Boiler Inspection and Insurance Co. and AIG’s 60 percent stake in reinsurer Transatlantic Holdings Inc., were expected to sell quickly.
“People are already looking at those. We want to make sure the contracts are rock solid,” he said. “Nothing has been signed, but we have started the process.”
He declined to say if Allstate Corp., where he was formerly chief executive and chairman, was interested or bidding for the personal lines or any other AIG businesses.
“I have no knowledge about what Allstate is doing or not,” Liddy said.
Asked if he thought shareholders should hold on to AIG, whose stock has lost 92 percent of its value this year, Liddy said, “It depends on if you are glass-half-full or glass-half-empty person.”
“Shareholders have to make their own decisions,” he said. “But I will tell you when we come out of this, our domestic property and casualty and foreign general insurance business (alone) will have business revenue of about $40 billion a year.”
At the end of 2007, AIG had $110 billion in revenue, a 3 percent drop from $113 billion in 2006.
(Reporting by Lilla Zuill; Writing by Paritosh Bansal; Editing by Brian Moss)