American International Group Inc. directors have been discussing the sale of the company’s mortgage insurance business “for a while” but “no final decision has been made about the unit,” the Wall Street Journal is reporting, citing sources familiar with the situation.
The report comes as activist AIG shareholders Carl Icahn and John Paulson are calling for the company and CEO Peter Hancock to spin off its life insurance and mortgage insurance businesses into separate companies, leaving AIG as a property/casualty insurer.
In a letter published on Wednesday, Icahn said breaking up the company would help AIG skirt the extra federal regulation it faces because of its size. Icahn accused CEO Hancock of failing to provide decisive leadership for the company. Paulson came out in support of Icahn the next day.
Hancock defended his approach in a statement. “We have taken important and significant steps to reposition AIG by both simplifying and de-risking the company, and realizing attractive valuations from noncore asset sales,” he said. “We remain on course and are determined to continue and accelerate these efforts.”
Hancock said he would discuss his efforts more during AIG’s investor conference next Tuesday morning after it releases its third quarter results.
Hancock has sold off AIG’s aircraft leasing business and taken other steps to simplify the company. He recently announced a deal to sell some Central American operations.
AIG’s mortgage insurance unit is Greensboro, North Carolina-based United Guaranty.
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