Filed Under:Markets, E&S/Specialty

Benmosche to Taxpayers: You’ll Make up to $10 Billion from Bailout

AIG CEO Robert Benmosche boards an elevator on Capitol Hill in Washington, May 26, 2010. (AP Photo/Pablo Martinez Monsivais)
AIG CEO Robert Benmosche boards an elevator on Capitol Hill in Washington, May 26, 2010. (AP Photo/Pablo Martinez Monsivais)

NU Online News Service, March 27, 10:30 a.m. EST

Robert H. Benmosche, president and chief executive officer of American International Group Inc., says American taxpayers will pocket up to $10 billion when the government assistance it received more than three years ago is repaid.

Benmosche tells Jim Cramer, host of “Mad Money” on CNBC, “The American people—between the Fed and U.S. Treasury—they’ll make between $5- and $10 billion profit when this is done.”

AIG was saved from collapse when the U.S. government made about $182 billion available to bail out the insurance conglomerate.

The company recently paid another $1.5 billion back to the U.S. Treasury Department to reduce the remaining debt it owes to the U.S. government to about $45 billion. The Treasury now owns $36.7 billion in AIG stock (a 70 percent stake), and the Federal Reserve Bank of New York (FRBNY) is still owed another $9 billion in a loan to Maiden Lane III, which holds collateralized debt obligations purchased by AIG Financial Products (AIGFP)—the unit blamed for AIG’s near-bankruptcy.

Benmosche tells Cramer that if AIG had followed the plan set when he arrived at the company, AIGFP would have lost $10 billion to $20 billion. Instead, according to the CEO, it made $4 billion as its complicated book was unwound.

In the meantime, the government’s support has not been a hindrance, he says.

“They let us run the company,” Benmosche says.

In selling off or getting out of business Benmosche says the company should not have been in, AIG has become a simpler, more diversified insurer with an “awful lot of capacity to buy back shares.”

“My assumption will be, we’ll be buying back those shares from the U.S. Treasury,” he adds.

The CEO also says he is in no rush to retire. Benmosche had made plans to retire after being diagnosed with cancer, but he told Cramer treatments have worked and he wants to stay on.

Featured Video

Most Recent Videos

Video Library ››

Top Story

Powerful 6.2-magnitude earthquake hits central Italy [photos]

The destructive tremor hit in the middle of the night, destroying small mountain towns and burying victims in the rubble of collapsed buildings.

Top Story

17 P&C insurance companies make the 2016 Fortune Global 500 list

This past year, the world’s largest companies, including 17 property and casualty insurance companies, saw cumulative sales decline for the first time since 2010.

More Resources

Comments

eNewsletter Sign Up

Specialty Markets Insight eNewsletter

Receive updates and analyses on hard to place and challenging coverages. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.