AIG Announces Sale Of Its Advisor Group Segment, Plans To Return $25 Billion To Investors Over Two Years

Shares of American International Group Inc (NYSE: AIG) were trading higher by more than 1.5 percent early Tuesday morning after the company announced that it has agreed to sell its AIG Advisor Group segment to investments funds affiliated with Lightyear Capital, LLC.

Terms of the deal were not disclosed.

AIG Advisor Group is comprised of four broker-dealers: FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial Services. The group also consists of more than 5,200 independent advisors and more than 800 full-time workers.

"AIG continues to review its business strategy and take actions to become a more efficient, less complex company, able to respond to our clients' needs with greater agility," said Peter Hancock, President and Chief Executive Officer of AIG. "We believe advisors, clients, and partners of Advisor Group will benefit from Lightyear's and PSP Investments' ownership of the independent business, and we look forward to a continued relationship with Advisor Group as an important distributor of AIG products."

'Executing Strategy of Leaner, More Profitable and Focused Insurer'

AIG also announced a series of strategic options, organizational changes and operational improvements to create a "leaner, more profitable and focused insurer."

The company's Board of Directors has committed to return at least $25 billion of capital to investors through share buybacks and dividends over the next two years. In addition, the Board also approved the IPO of up to 19.9 percent of United Guaranty Corporation as a "first step towards a full separation."

Finally, AIG will create nine "modular" business units with "greater end-to-end accountability, each with its own specific financial metrics" along with a new "legacy" portfolio to hold non-strategic assets.

"With these actions, AIG has taken another major step in simplifying our organization to be a leaner, more profitable insurer, while continuing to return capital to shareholders and improve shareholder returns," said President and CEO Peter Hancock. "The creation of more nimble, standalone business units that can grow within AIG or be spun out or sold allows us to do what is in our shareholders' best interests."