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 What's this? American International Group Inc.'s (NYSE:AIG) main business -- the property and casualty division -- wants out, and apparently CEO Edward Liddy is happy to oblige. The move to separate the newly named American International Underwriters Holdings, or AIU Holdings, is a dramatic shift given the unit was supposed to be the heart of the newly restructured AIG after the bailout, the only business the company would retain. It looks like Liddy's strategy has completely changed now that the government has pretty much decided AIG's restructuring as the sale of its Alico, Philamlife unit and AIA were scraped in the government's last bailout. Evidently, the spinoff will go public in the first or second quarter of 2010 and rename itself, CEO Edward Liddy told Reuters. But in the meantime, if a buyer steps up to the plate and would like to take on the business or even a piece of it, the option remains open. Why the change in strategy? Because it might be the only way to save the company, as CNN Money reported: " 'The plan has been, since the first days of the bailout, to sell off the crown jewels including its investment arm and very strong insurance units, because that's all the market will accept now,' said Julie Grandstaff, managing director of StanCorp Investment Advisers. 'It was the only way to save the organization, but it's questionable if there will be a freestanding AIG in the end.' " In other words, it is not really that surprising that AIG would decide to sell or spin out its property and casualty business. AIG has been struggling to sell assets in order to pay back the government, and time has not been the insurer's friend. The valuations of AIG's units have sunk along with the economy, and the bidders with financing are few and far between. The growing public sentiment over the $180 billion bailout and the bonus payouts have further deteriorated the business' reputation and the work environment for employees, which prompted AIG to change the name of the property and casualty unit to AIU in early March. However, the name change wasn't sufficient enough to distance the company from its parent, according to the Times Daily: "The renamed A.I.U. quickly began issuing new business cards to employees and printing promotional materials, particularly in Asia. But A.I.G. has now decided that the A.I.U. name does not represent enough of a change, and is in the final stages of choosing a new one, said Leslie J. Mouat, A.I.U.'s regional president for Southeast Asia. 'The advice we've received is A.I.U. may be a bit close to A.I.G. -- we don't want to appear as the same leopard with different spots.' " AIU isn't the only AIG unit that wants out as quickly as possible. Auto insurer 21st Century, which was sold to Zurich Financial Services' Farmers unit for $2 billion on April 17, is reportedly already starting integration. Meanwhile, there are several other assets that AIG has sold:
With these statistics, it appears that the chances of AIG surviving on its own are slim. - Maria Woehr Also see: David Merkel: To What Degree Were AIG's Operating Insurance Subsidiaries Sound? AIG to sell ILFC at fire sale price? AIG asset management sale heats up AIG to Fed: You pay us so we can pay you AIG sells auto insurance asset for $1.9B
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