Business

AIG’s hand out again

Maybe AIG should stand for Another Injection from the Government.

Bailed-out insurer American International Group reminded Wall Street of the extent of its problems when it warned that its core insurance business continues to struggle and that the company — already in the hole to the American taxpayer to the tune of around $162 billion — might need another cash injection from Uncle Sam.

While CEO Robert Benmosche said the insurance giant had made strides in selling off businesses and trimming assets at its financial products unit — the group at the heart of its collapse — AIG still faces a long and tortuous road to recovery.

“The last year and a half have been very difficult for AIG,” Benmosche said. “But we have to look forward, not backward.”

The company’s challenges were in evidence in a filing with the Securities and Exchange Commission, in which the company revealed it might need additional rescue cash from the government if the economy falters.

“Without additional support . . . there could exist substantial doubt about AIG’s ability to continue as a going concern,” the company said in the filing.

AIG shares tumbled nearly 10 percent yesterday to close at $24.77 a share.

The insurer said its core property and casualty business, which took a big hit last year, will likely continue suffering in 2010. In addition, the company said it would continue providing financial life support to its aircraft-leasing and consumer-finance businesses, both of which have been hard hit by the recession, through next February.

Nevertheless, there were some improvements. AIG said that though it posted a nearly $11 billion loss for all of 2009, that was far better than the nearly $100 billion loss it recorded in 2008.

For the fourth quarter, the company recorded a loss of $8.9 billion vs. the $62 billion in red ink reported in the year-earlier quarter.

“While we are not out of the woods by any stretch, these numbers represent substantial improvement from just one year ago,” Benmosche said in a recorded statement.

The firm also is hoping to raise more than $25 billion by offloading units, including American International Assurance, through an initial public offering that could fetch as much as $10 billion, and American Life Insurance Co., which the company is in talks to sell to rival MetLife for roughly $15 billion.

AIG’s earnings came as the Federal Reserve Bank of New York announced that it was naming Peter Langerman as a trustee of the firm’s government-controlled Credit Facility Trust. He replaces Douglas Foshee, who resigned last Thursday.