Friday, February 29, 2008

Big losses in AIG


American International Group Inc., the largest insurer by assets, said Joseph Cassano will step down from running the financial products unit after $11.1 billion in losses on guarantees sold to fixed-income investors.

Cassano's retirement is effective March 31, Chief Executive Officer Martin Sullivan said today in a conference call. He will serve as a consultant through the year, Sullivan said.

AIG reported the biggest quarterly loss in its 89-year history yesterday after writing down the value of so-called credit-default swaps. The New York-based company said for the first time in yesterday's statement that realized losses on the portfolio "could be material'' to quarterly earnings. The fourth-quarter net loss was $5.29 billion.

NOTE: AIG is the parent company of AIA (American International Assurance) in Singapore.

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