AIG to sell Asian insurance business to pay back bailout
TEXT OF STORY
JEREMY HOBSON: Some good financial news today for U.S. insurance giant AIG, and potentially also for the U.S. Treasury and us taxpayers. AIG will sell off its valuable Asian insurance business, a move that will jump start its plan to pay back more than a $100 billion in taxpayer bailout money. Marketplace’s Mitchell Hartman reports.
MITCHELL HARTMAN: AIG was rescued with around $180 billion in taxpayer money as the financial crisis gathered speed two years ago. Government officials believed that if the giant insurer was allowed to collapse under the weight of band investments it would have a devastating effect across global markets. But AIG’s core insurance business has remained strong, especially in Asia where the potential to sell new life insurance policies to a growing middle class is huge. And that explains AIG’s success today, with the initial public offering of its Asian insurance subsidiary AIA. The IPO will be worth as much as $20 billion. That money will help AIG make the largest repayment of bailout money to date back to the U.S. Treasury. It’s still a drop in the bucket, though. Most of the money AIG owes the government will be recouped as the Treasury sells of its 80 percent stake in the company on the stock market.
I’m Mitchell Hartman for Marketplace.
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