During the American International Group (
AIG) earning's call on Tuesday, CEO Peter Hancock told analysts that United Guaranty Corporation (UGC), a mortgage insurance company that provides underwriting and risk solutions to mortgage lenders worldwide, was not for sale.
The mortgage insurance business had been identified as a potential spin off by pundits calling for the company to be split up.
“UGC is a business which was for sale for virtually nothing back in the crisis days,” said Hancock. “And since then we've invested in it, modernized it and taken it from number five to number one in its industry, and it's performing very well today... it is a core business making a significant contribution to the company.”
But Hancock did point out that AIG has kept UGC “as a very modular unit” and said “we are always flexible if the right opportunity to monetize assets was to come along,” suggesting the company could be swayed by the right offer.
No doubt this would please Josh Stirling, an analyst with Bernstein, who said Monday that the company should be broken up and sold in a healthy M&A market for more than the sum of its parts.
Coincidentally, Stirling did say his proposal was “going back to the future and what the plan was in 2009,” which, as Hancock pointed out, is when UGC was last on the table.
