Life Insurance

A.I.G. Sells Unit to MetLife

(THE NEW YORK TIMES) - The American International Group agreed Sunday to sell a second major insurance unit, this one to MetLife for about $15.5 billion, the two companies confirmed Monday. It was the second deal the insurer has struck in one week, raising about $51 billion to repay its taxpayer-financed rescue.

Now comes the hard part.

Even after wiping away $51 billion of debt, A.I.G. will owe roughly $50 billion to the government. That amount is likely to keep slowly growing, because the government made large sums available — $182 billion in a number of forms — when it came to the rescue. The company has not drawn down that full amount, but every few months it taps a billion or two billion more, to finance its restructuring or bolster its insurance units.

The boards of both companies met Sunday and approved the sale of the A.I.G. unit, the American Life Insurance Company, known as Alico, the people briefed on the matter said.

The two latest deals involve selling what the insurance giant has called its “crown jewels,” leaving it with no obvious pieces to sell off to raise big blocks of cash to pay the rest of the debt.

If the company continues to draw on its government assistance, it will have to make the value of its businesses grow even faster, in order to stay ahead.

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