Icahn Again Pushes for AIG Split in Wake of MetLife's Breakup Plan -- Update

By Tess Stynes 

Billionaire investor Carl Icahn again urged American International Group Inc. to split up, citing MetLife Inc.'s recent move to shed a chunk of its U.S. life-insurance business as well as a recent poll of AIG shareholders showing a mandate for change.

In an open letter on his website, Mr. Icahn said he expects AIG's strategic update, set for Jan. 26, will fail to present a drastic strategic shift and instead will be limited to incremental changes such as small-scale asset sales and incremental cost cutting.

In response, AIG said it continues to take steps to narrow its focus, improve its financial performance and return capital to shareholders. The company also added it maintains an active dialogue with shareholders, including Carl Icahn.

The activist investor also said AIG Chairman Douglas Steenland suggested in a recent discussion that if shareholder wishes go against those of the CEO, the board would definitely take notice.

Last week MetLife said it was seeking to divest itself of a large piece of its U.S. insurance unit to become small enough to ease some of the capital burden it is expected to face under new federal regulations that categorize it as a systemically important financial institution, or SIFI.

AIG has been under pressure to split up since last year, when Mr. Carl Icahn and John Paulson proposed breaking the global insurance conglomerate into three separate companies as a way to escape the SIFI tag.

AIG currently is one of three insurers designated as nonbank SIFIs, subject to yet-to-be-determined capital requirements by the Federal Reserve to insure they have thick cushions for absorbing unexpected losses.

The recent survey by Sanford C. Bernstein stock analysts evaluated investors' opinions on plans proposed last year by Messrs. Icahn and Paulson, a divestiture program proposed by the Bernstein analysts themselves, and AIG's existing initiatives.

AIG shares rose 1% in morning trading.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

January 19, 2016 10:00 ET (15:00 GMT)

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