NEW YORK (TheStreet) -- Shares of American International Group (AIG) - Get American International Group, Inc. Report were higher in mid-afternoon trading on Tuesday as the company is in talks of selling insurance operations related to Lloyd's of London to Canada's largest pension fund.
The Canada Pension Plan Investment Board (CPPIB) is exploring the possibility of purchasing AIG's business at Lloyd's of London, the Wall Street Journal reports. AIG owns an underwriting syndicate at Lloyd's of London, an insurance and reinsurance marketplace.
The discussions further the New York City-based insurance giant's efforts to improve results by limiting its focus and delivering approximately $25 billion in capital to shareholders. Meanwhile, the Canadian pension fund has been moving to establish itself as a major player in the insurance industry.
A deal with the CPPIB could generate hundreds of millions of dollars in proceeds for AIG. The company has recently been under pressure to hone performance, as activist investors Carl Icahn and John Paulson have called on AIG to break itself into three parts.
CPPIB is also in talks of buying a related insurance company based in Bermuda.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate AMERICAN INTERNATIONAL GROUP as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and poor profit margins.
You can view the full analysis from the report here: AIG