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AIG considers IPO or 20% stake sale for all times and retirement unit

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© Reuters. FILE PHOTO: Banners commemorating the one centesimal anniversary of American Worldwide Group Inc. adorn the New York Inventory Alternate

(Reuters) – Insurer American Worldwide Group Inc (N:) stated on Friday it’s contemplating an preliminary public providing or a non-public sale of practically 20% of its life and retirement enterprise to separate the unit from the remainder of the corporate over the approaching 12 months.

The feedback throughout AIG’s third-quarter earnings name supplied additional element on the way it may perform the long-discussed divestiture, which it introduced final week.

“We at the moment ponder both an IPO or a non-public sale of as much as 19.9% of Life and Retirement, adopted by a number of inclinations of our remaining possession curiosity over time,” President Peter Zaffino stated on the decision. AIG final week named Zaffino to take over as chief government officer in March.

AIG shares have been up about 5.5% at $35.26 in midmorning buying and selling in New York.

Zaffino stated AIG had no plans to interrupt up the life and retirement unit and promote it in items, and that it was aiming to complete the separation of the enterprise in 2021.

The corporate plans to make use of proceeds from the sale to scale back its debt, Chief Monetary Officer Mark Lyons stated. Activist investor Carl Icahn had pressed for such a divestiture in 2015.

The corporate reported a stoop in third-quarter revenue on Thursday, harm by losses associated to storms, wildfires and the COVID-19 pandemic.

Adjusted pretax revenue within the common insurance coverage enterprise declined by 18%, due largely to elevated underwriting losses from catastrophes, the corporate stated.

Adjusted pretax revenue in its life and retirement enterprise, in the meantime, rose 51% due to price containment and funding revenue, the corporate stated.

International insurers are battling a pointy rise in pure disaster payouts at a time of coronavirus-induced losses. The investments that insurers depend on to pay claims have additionally come underneath strain.

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