When insurance giant AIG announces its third quarter results on Monday, many analysts expect the company to post a significant loss. This announcement coupled with the recent liquidity crisis facing the company is causing unrest among shareholders.
“The company is facing market capitalization declines which exacerbate matters and possibly force divestitures. Additionally, AIG may need to restructure terms of the government’s capital infusion.” said Steven Wevodau, an insurance industry consultant. Wevodau added “It appears that the company’s problems are primarily related to its financial services operations as a result of insuring mortgage-backed securities. The traditional insurance businesses are still very viable and reasonably strong.”
AIG shares have lost over 87% during the third quarter and are expected to drop further ahead of the earnings announcement.
