American International Group revealed it’s now looking to make a push into residential property loans after selling its mortgage-guaranty unit United Guaranty to Arch Capital Group this summer, according to an article in The Financial Times by Alistair Gray.
Doug Dachille, chief investment officer of the largest US insurer by market capitalisation, told investors that increasing AIG’s allocation to residential mortgages was one of his “key initiatives”.
A presentation slide implied that by doing more mortgage loans, the insurer aimed to replace a big chunk of the annual profits of about $400m that it would forgo by selling UGC.
The article noted that AIG does not plan to originate residential mortgages itself, and instead, it plans to acquire loans from direct mortgage lenders and securitize them.
Back in August, AIG announced it sold United Guaranty for about $3.4 billion. At the time, United Guaranty was considerably smaller than AIG’s other businesses.