American International Group Inc. (
AIG) has announced the sale of about 256 shares of PICC Property & Casualty Co., the largest non-life insurance company in China, according to
Bloomberg Business.
AIG made $500 million off of the deal. It still owns approximately 1.2 billion of its PICC shares, representing an 8.2% stake in the Chinese company.
The commercial insurer, which is now half the size it was in 2008 due to post-bailout asset sales, hopes to both regain many of its bonds and reacquire stock.
PICC shares were a worthwhile investment for AIG, as they increased in value by 55% last year, surpassing the 12% benchmark in China’s Hang Seng Index.
This is all part of a risk adverse long-term strategy for the company.
CEO Peter Hancock recently wrote a letter to investors stating that AIG should focus on “intrinsic value,” which “…means not being distracted by normal quarterly fluctuations in earnings per share, and instead patiently working to deliver growth in book value per share.”
This may involve selling other factions that are misaligned with the company vision put forth after it repaid $182.3 billion to the U.S. government.
“Floating or selling businesses that lack current or realizable potential synergy with our core operations” will continue to remain a priority, according to Hancock’s letter.
