AIG taking its time on a variety of assets

NEW YORK (Reuters)—American International Group Inc. may raise its stake in Asian insurer AIA Group Ltd. someday and is open to offers for its ILFC airplane leasing business, but will bide its time on all these things, Chief Executive Bob Benmosche said Wednesday.

Mr. Benmosche, speaking at a Bank of America Merrill Lynch insurance conference, made clear that AIG was in no rush to make any decisions on key assets. The company, bailed out by the U.S. government in late 2008, is still 77% owned by the Treasury Department.

As part of its efforts to repay that bailout, it took AIA public in Hong Kong in 2010 but retained a one-third stake. When AIA shares rise, that creates substantial profits for AIG, but when the stock falls it generates major losses.

Mr. Benmosche said one option might be to someday raise AIG's stake in AIA to 51%. Before that, though, AIG will have to pay off the government's preferred interest in the entity that holds the AIA shares.

Proceeds from a sale of International Lease Finance Corp. are expected to go toward that goal. AIG filed for an initial public offering for ILFC last fall but has done little since. Mr. Benmosche said the time for an IPO was not right, given "noise" in the aviation market. But he added he would listen to reasonable offers for the unit.

He made clear that one asset not going anywhere is United Guaranty Corp., the company's mortgage insurance business. At one time UGC was seen as a noncore asset that might be sold to raise capital. But as competitors have struggled, UGC has become the largest mortgage insurer in the country.

Mr. Benmosche described UGC as a core asset on Wednesday and said it gave AIG valuable insight into the mortgage market.