NU Online News Service, April 30, 3:40 p.m. EDT
Another name change for AIG's commercial and property-casualty sector, now going under the title "AIU Holdings," may be in the works.
An article in today's edition of The New York Times reported that a second name change is in the offing. The article noted that some believe the change to AIU did not provide the needed separation of healthy p-c units from the tainted brand of its parent, following a federal bailout of AIG after credit default swaps by the company's Financial Products arm nearly took down the organization.
The p-c units are in the midst of a review, the report noted, "aimed at distinguishing these well-capitalized businesses from AIG."
Once that brand review is completed and a new name is arrived at, the p-c unit plans to hang a new sign on the building it occupies in New York City, it was learned. Some weeks ago, the AIG sign was taken down as the operation became AIU Holdings.
Last month, in comments to the Conference of Special Risk Underwriters in New York, John Doyle, president and CEO of AIG Commercial Insurance, said that while "it is tragic, we think it's best if we distance ourselves from the damaged brand of our parent."
"In spite of our best efforts to separate ourselves from the problems of our parent and get the message out that our insurance company assets are separate and secure, we did conclude that we needed to create more distinction between us," said Mr. Doyle.
"That way, market noise or negative news about AIG does not affect our insurance business," he concluded.
Mr. Doyle described the launch as "the first step to create a new business separate from our parent company. This will enable us to better distinguish ourselves."
AIU Holdings will have its own board of directors and management team, as well as a brand identity distinct from AIG–which initially will own 100 percent of the new organization. AIU hopes to diversify its ownership and raise capital by selling off a minority stake–"probably 20 percent"–via an initial public offering, depending on market conditions, according to Mr. Doyle.
AIU Holdings will likely issue its own financial statements and hold separate calls with the analyst community to further establish the new company as independent from AIG, he noted.
Mr. Doyle said the restructuring was also critical to provide direct access to the debt and equity markets, as well as offer stock to attract and retain key people.
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