When Robert Benmosche was named CEO of AIG, I thought it was a good thing. Ed Liddy, possibly tired of the abuse, wanted to move on. Liddy was primarily skilled with personal lines P&C insurance, which was a small part of AIG, and has been sold off. Benmosche’s skills extend to that — MetLife has a small personal lines subsidiary, but he has run the largest life insurer in the US. AIG has grown to be as much a life insurer as a P&C insurer, having grown through the acquisitions of Sun America and American General.
Benmosche has his work cut out for him, and it may be an impossible task. Quoting from today’s WSJ article:
As shares of American International Group Inc. continued to ascend Thursday, newly minted Chief Executive Robert Benmosche said he is taking a far more patient approach than his predecessor toward selling assets to repay the government.
He is willing to wait as long as three years, he said, to offer stakes in two multibillion-dollar foreign units that the insurer had been racing to spin off.
“It’s not a question of if, but when,” Mr. Benmosche said in an interview with The Wall Street Journal at his home here. “Once the market gives us a price that I think is fair, we can go forward. … If we sell too soon, everyone loses.”
And the money quote:
After analyzing all of AIG’s businesses, Mr. Benmosche said, he determined the company wouldn’t be able to repay the government even if it sold everything. But he suggested that if he can bolster the businesses before selling off units, the situation might improve.
“The sum of the parts are a little below the whole. The whole has to be big enough to pay back the government, and with a little hard work there will be something left called AIG,” he said.
Okay, so the value of the equity is zero, but maybe AIG can grow out of the situation with government aid, waiting for higher valuations to appear? The article continues:
In May, AIG said it planned to “accelerate” that process for one of the units, American International Assurance Co., which sells life insurance in Asia.
