AIG Less Reliant on U.S., on Path to Repaying Bailout, CEO Says

[Purveyor]

By Jamie McGee

April 2 (Bloomberg) -- American International Group Inc. Chief Executive Officer Robert Benmosche said the insurer is becoming less reliant on U.S. aid as it sells units, borrows from debt markets and strengthens operations it intends to keep.

The bailed out insurer is “now on a path” to repaying the loans included in its $182.3 billion rescue package, Benmosche said in an interview yesterday. The company will first pay off the $25.3 billion it owes the Federal Reserve before deciding how to raise the cash it needs to end its separate arrangement with the U.S. Treasury that includes a draw on a second credit line of more than $40 billion.

AIG reached agreements to sell its international life- insurance units for more than $50 billion in the first quarter, and its plane-leasing arm issued unsecured debt for the first time since May 2008. Standard & Poor’s said yesterday results were improving at AIG’s remaining units and that the insurer may recover from the junk status assigned to its stand-alone credit by yearend.

“We are well on our way to paying back the Federal Reserve” with the sales of American Life Insurance Co. and AIA Group Ltd. to MetLife Inc. and Prudential Plc, Benmosche said. “We are beginning to show the appropriate returns you’d expect of a company of our stature.”

Chartis, AIG’s U.S. and overseas property-casualty unit, competes against Travelers Co. and Ace Ltd., and has been able to retain clients amid the federal bailout, Benmosche said. About 75 percent of insurance buyers using AIG said they planned to stay with the insurer compared with 41 percent six months earlier, Jay Gelb, a Barclays Plc analyst in New York, said in a Dec. 14 research note.

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