TOKYO, Oct. 30, 2009 (Kyodo News International) --
(Editors: ADDING DETAILS)

American International Group Inc. has withdrawn its plan to sell its two Japanese insurance units and will continue to keep them as a potential source of growth to boost overall company earnings, the Japanese arm of the U.S. insurance company said Friday.

The move by the insurance giant to keep AIG (NYSE:AIG) Star Life Insurance Co. and AIG Edison Life Insurance Co. under its wing comes after AIG management visited Japan and assessed that their businesses are strong enough and viable.

AIG is currently under U.S. government-supervised rehabilitation since it has been suffering financial woes from last fall.

AIG had been negotiating the sale of the two Japanese insurance units and a strong candidate as a buyer was U.S. financial services firm Prudential Financial Inc. (NYSE:PRU)

Meanwhile, AIG will keep its plan to sell off or have listed American Life Insurance Co., another group firm which has operations in Japan.