American International Group Inc.’s plan to spin off a portion of its mortgage insurance unit is “almost pointless” given the challenges that Chief Executive Officer Peter Hancock faces to fix the much larger property-casualty business, an analyst at Keefe, Bruyette & Woods said.

“AIG’s fundamental problem is very poor P&C profitability, and absent really fantastic price tags, we really don’t see the point of selling better-performing businesses so it can buy back more shares of the remaining underperforming businesses,” KBW’s Meyer Shields said in a note to investors dated Sunday. “Mortgage insurer valuations have compressed significantly over the past two years, so the timing of this planned spinoff is also very far from ideal.”

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access