Business as usual for Irish arm of rescued AIG

THE SALE by American International Group (AIG) of a number of its business units following its bailout by the Federal Reserve will not affect its Irish operations, the company said last night.

A spokesman for the Irish arm of AIG said the insurer had decided to focus on its property, casualty and foreign general insurance businesses.

As a result "the Irish AIG general insurance business is unaffected, and will continue to operate as usual", a company spokesman said.

The move ends speculation that the Irish unit may have been put on the market.

The Irish arm of the insurance giant, AIG Ireland Ltd, employs 400 staff at three offices in Dublin. It is a commercial insurer with annual premiums of €200 million and reported profits of €44.1 million in 2007.

AIG said it plans to sell its remaining businesses to pay off $85 billion in borrowings from the US government, and is working on alternatives for its financial products business and its securities-lending programme.

AIG said it had drawn $61 billion on the Federal Reserve facility as of September 30th. The deal carries heavy interest and fees, and must be repaid within two years.

"We have already been contacted by numerous strong, stable parties, and we expect that buyers will recognise the value of these properties," AIG chairman and chief executive officer Edward Liddy said in a statement yesterday. "Our goal is to emerge from this process as a smaller but more nimble company."

He declined to say how quickly he expects any deals to be signed.

Asked if he thought shareholders should hold on to AIG, whose stock has lost 92 per cent of its value this year, Mr Liddy said: "It depends on if you are glass-half-full or glass-half-empty person.

"Shareholders have to make their own decisions. But I will tell you when we come out of this our domestic property and casualty and foreign general insurance business will have business revenue of about $40 billion a year."

Once the world's largest insurers, AIG accepted a federal bailout on September 16th after losses in a financial products unit drove it to the brink of collapse. At the end of 2007 AIG had $110 billion in revenue, a 3 per cent drop from $113 billion in 2006.

At the end of 2007 AIG had 116,000 employees in 130 countries and territories.

- (Additional reporting Reuters)