Robert Benmosche, the newly appointed chief executive of AIG, has started to cut up the insurer’s restructuring plan, deciding it is better to hold on to an investment advisory unit that is part of the insurer’s
retirement services group.
“Benmosche is beginning his strategic review and this is one of his early decisions,” AIG spokesman David Monfried told Reuters on Tuesday.
Though the move is a small one, it shows that the CEO, barely a week into the job, may move quickly to recast an earlier restructuring plan to repay taxpayers after AIG racked up more than $80 billion in loans from the U.S. Federal Reserve and Treasury.
Benmosche took AIG’s helm on Aug. 10. He is expected to draw on his previous experience as chief executive of MetLife Inc to help drive asset sales, a process that had gotten off to a sputtering start.
American International Group Inc., once the world’s largest insurer, has been struggling to find buyers for its larger properties, hampered by tighter credit markets. That led the company to hatch an alternate plan to sell stakes in some units through initial public offerings.
Benmosche took over MetLife when it was a mutual insurer, or owned by its policyholders, and took it public earlier in the decade. It is now the largest U.S. life insurer.
The federal loans helped stabilize AIG after it ran up massive losses on investments that soured as the U.S. housing market collapsed.
“The broker-dealer group is core to the retirement services business,” said AIG’s Monfried. “We intend to keep it and continue to build a world-class financial advisory business.”
It is comprised of three companies: Sagepoint Financial Inc., Royal Alliance, and FSC Securities Corp.
The unit had previously gone by the name AIG Financial Advisors but like numerous other parts of the insurer it recently re-branded away from the AIG name.
The companies have adopted new names to try to distance themselves from the AIG brand, which is now badly tarnished after the company’s near collapse.
The broker-dealer companies are staffed by independent agents and brokers, said Monfried.
He declined to comment on whether Benmosche has already decided on any other tweaks to the company’s restructuring plan.
(Reporting by Lilla Zuill, editing by Matthew Lewis)
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