AIG Hawaii may be sold off
POSTED: Friday, October 10, 2008
The profitable AIG Hawaii is on the block to be sold by its financially troubled parent company, which is seeking to generate cash to pay an $85 billion emergency loan by the Federal Reserve.
American International Group Inc. is seeking to sell its domestic personal lines business, which includes AIG Hawaii, according to company spokesman Joe Norton.
"Some of these businesses that we're selling are really terrific businesses," he said. "It's a highly flexible process to the extent that we can if we want to sell fewer assets than more. If we get good prices on the good assets such as personal lines of business we can pay off the loan faster."
American International Group has drawn $61 billion of an $85 billion loan as of last week.
The company looking to maximize the value of the assets it has put on the block, prevent franchise erosion and sell operations to brand-name companies with strong ratings and balance sheets, Norton said.
Robin Campaniano, president and chief executive of AIG Hawaii, said he didn't know how serious the parent company was about selling the local operation since it has hundreds of operating entities around the world.
"The way we read it here is they're going to put up most of the companies and want to put up the ones that are good assets that can attract top dollar," Campaniano said. "We don't really know who or what will happen. From our perspective it's almost no big thing for us."
AIG Hawaii, the state's third-largest auto carrier, insures more than 100,000 cars statewide and has more than 100,000 personal insurance policies for workers' compensation, homeowners, life and retirement plans.
The company, which expects to write nearly $120 million in premiums in the state for fiscal 2008, has been operating in Hawaii for 55 years and has 340 employees at offices on Oahu, Maui, the Big Island and Kauai.
Any sale of the local unit is subject to the approval of state Insurance Commissioner J.P. Schmidt, who is working with commissioners on a national level and the new CEO of American International Group, which is looking to find a buyer for numerous subsidiaries as a package deal.
"We are aware there's been some interest in AIG Hawaii as a part of a package," Schmidt said. "We don't know what the impact will be until we actually see what kind of transaction it is. I am going to be looking at it very closely to ensure it's the best possible outcome for the people of the state of Hawaii."