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 The biggest U.S. insurer by premiums also said on Tuesday it would
cut $1.6 billion of costs and return at least $25 billion to
shareholders over the next two years.
AIG's cost structure has been a cause of concern for investors as
rock-bottom commercial property and casualty insurance rates across
the industry have battered underwriting.
The insurer said it planned to streamline its business through
divestitures, including the sale of AIG Advisor Group, a network of
independent broker-dealers, to Lightyear Capital LLC and PSP
Investments.
AIG will also sell up to 19.9 percent of United Guaranty Corp in
mid-2016 as a first step toward separating the business entirely.
The company said it would overhaul its operational structure, making
it easier to take parts of its commercial or consumer businesses
public or to sell them if they underperform.
AIG's shares were up 1.8 percent in premarket trading.
Tensions have been mounting between Chief Executive Peter Hancock
and Icahn over the billionaire's repeated suggestion that the
insurer should split into three - an idea that Hancock has rebuffed.
The move would return more cash to shareholders, Icahn has said,
helping AIG rid itself of the regulatory burden of being a
too-big-to-fail insurer, which require higher capital cushions.
"A full break-up in the near term would detract from, not enhance,
shareholder value," AIG Non-Executive Chairman Douglas Steenland
said in a statement.
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Icahn disclosed in November that he owned a 3.4 percent stake in AIG,
making him the insurer's fifth-largest shareholder at the time,
according to Thomson Reuters data.
Pressure across the insurance industry to slim down was highlighted
this month when MetLife Inc <MET.N>, the largest U.S. life insurer,
said it would split a substantial portion of its U.S. retail
business due to the "regulatory environment."
AIG said it was aiming to improve its commercial property and
casualty accident year loss ratio by 6 percentage points, and set a
new 2017 consolidated return on equity target of about 9 percent.
(Reporting by Richa Naidu in Bengaluru; Editing by Robin Paxton)
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