(Bloomberg) — Carl Icahn, the billionaire investor known for picking fights with corporate boards, said American International Group Inc. should split into three companies, one selling property-casualty coverage, another selling life insurance and a third backing mortgages. The stock rallied in early trading.
“There is no more need for procrastination,” Icahn said in a letter posted on his website Wednesday and addressed to AIG Chief Executive Officer Peter Hancock. “The time to act is now.” Icahn said on Twitter that he holds a “large stake” in AIG.
While AIG has climbed about 8.8 percent this year through Tuesday’s close, the insurer still trades for less than 80 percent of book value, a measure of assets minus liabilities. Travelers Cos., the lone property-casualty insurer in the Dow Jones Industrial Average, trades for more than 1.4 time book value.
Icahn said a split would help AIG limit regulation. The insurer has been deemed by a U.S. panel as a systemically important financial institution because of its size, a designation that brings increased Federal Reserve oversight.